The runaway success story of 2019 was Beyond Meat, a Los Angeles-based maker of meat substitutes that as of Dec. 30 was on track to finish the year up nearly 200% from its IPO price. (Whether Beyond Meat is a tech company is debatable; it isn’t tech in the traditional sense, but often appeared on startup lists because of its California roots, Silicon Valley-style approach to growth, and billion-dollar private valuation.)

The next top performers measured were Zoom (video chat software), Medallia (customer-feedback management software), CrowdStrike (cybersecurity technology), and Datadog (monitoring and data analytics for developers).

The companies whose IPOs were well-received had a couple of things in common. First, with the exception of Beyond Meat, their businesses were in core tech fields, like software, analytics, and cybersecurity. Second, they were either already turning a profit when they filed to go public (Zoom) or reporting losses that were relatively small and/or showing signs of improvement (CrowdStrike, Datadog, Medallia).

The same can’t be said for onetime Silicon Valley darlings Uber, Lyft, and WeWork. Uber and Lyft have popular smartphone apps, but they are primarily logistics companies in the business of moving people and things. WeWork is a real-estate leasing company that managed to market itself as a tech company until it all fell apart.

Technology startups command high private valuations in part because software companies typically have low costs and high margins. Logistics businesses, on the other hand, tend to have high operating costs and thin margins. That didn’t stop venture capitalists from valuing companies like Uber at software-style multiples and enabling their frenzied growth with billions of dollars in financing.

Public investors have been less impressed with the stories these companies tell, and more preoccupied with the big losses they report each quarter. The stock prices of ride-hailing firms Uber and Lyft have both dropped more than 30% from their IPO prices. Uber’s public market cap is nearly $20 billion, or 27%, less than the roughly $70 billion valuation agreed on by private investors prior to its IPO. Shares of workplace messaging software company Slack are down about 15% from their IPO price, though the firm is valued more highly in the public markets than it was in private.

Uber CEO Dara Khosrowshahi has now set his sights on making Uber profitable by 2021. Startups eyeing 2020 IPOs, such as Airbnb and online mattress seller Casper, are getting their books in order (paywall). If 2019 began as a year of great expectations for tech IPOs, it ended as one of tough realities.

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