Unity thinks a lot could go wrong with its IPO
Welcome to the new normal of going public.
Image: Campo Santo
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?
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."
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?)
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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