Unity thinks a lot could go wrong with its IPO

When your grandkids ask you what 2020 was like, just hand them Unity's S-1 filing. The (long) document filed ahead of its IPO touches on every big news story of the summer, painting a pretty scary image of what it's like to be in the tech industry right now.

Unity basically admits that it's at the mercy of Apple and Google, saying the two companies could "limit or discontinue our or our customers' access" to their platforms and app stores. Wonder if anything was on its mind when that was written?

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• In a particularly thinly veiled shot at Apple, Unity writes that "in some cases [App Store] requirements may not be clear, and our interpretation … may not align with the interpretation of the operating system platform provider."

For Unity, these problems aren't just theoretical. The filing discusses Apple's move to kill IDFA, highlighting the negative effect that could have on Unity's ad business. The company is worried about legislation that could similarly hamper ad tracking, saying "the CCPA could mark the beginning of a trend toward more-stringent privacy legislation in the United States … [which could] adversely affect our business."

• All the other big hits are there, too: COVID-19 has created an uncertain economic environment; U.S.-China relations are on the rocks; it's hard to hire good engineers.
• Plus, there are some weird ones that we might have to get used to: "There is no guarantee that we will be as effective while working remotely," the company writes, citing care obligations and the mental and physical toll of the pandemic.

It's not all doom and gloom, though. Unity said its revenue was $541 million last year, up 42% on the year before, and pointed to its growing revenue from companies outside of gaming as a particularly promising area. (It's still loss-making, though, and those losses actually increased year-on-year. Hey, this is a modern tech IPO, remember?)

• There's some juicy info on ownership and pay packages, too. Sequoia owns 24.1% of the company, while Silver Lake's got 18.2%. And CEO John Riccitiello was paid $8.5 million last year. (Unity was valued at $6 billion last year, for context.)

But mainly the disclosures are a big reminder of just how the current state of affairs works: For many tech companies, unless you're one of the big five, your fate rests almost entirely in Big Tech's hands. In Unity's IPO, we'll see if investors are willing to tolerate that during such uncertain times.

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