The inability or unwillingness of many venture-backed startups to go public is starting to sting.

Backers of venture funds are increasingly leery about putting more capital to work in the startup landscape without getting some of their prior cash back; but with IPOs not expected to pick up for quarters longer, and the backlog of richly priced startups stretching long into the distance, there’s little expected in the form of relief on the horizon.

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But that doesn’t mean that some companies aren’t going public. They are! And some of the newly public entities are even venture-backed or at least clothed in the language of tech companies. Their IPOs have been crushing successes. This is somewhat embarrassing for what we might call the traditional center of tech and startups: software companies.

The stonking Cava public offering (privately backed fast casual food with ecommerce elements) was joined this week by the debut of Oddity Tech, a beauty-focused company that screams about its use of modern technology tools to create its products. Oddity, like Cava, priced above its final IPO price range and shot higher in the wake of starting to trade.

Food? Beauty? Certainly these are consumer product categories that build big brands, big businesses, and material cash flow in certain circumstances. But they aren’t, you know, tech-quality in their growth and gross margins, right?

Have I got news for you.

Perhaps there’s something to the intra-tech conversation today asking why software companies aren’t more profitable. After all, if you have high-margin recurring revenue and can’t balance the books, are you really that business savvy?

Lessons, learnings

There’s a discussion in tech that the idea that software companies will grow and become increasingly profitable over time is at least partially incorrect. While the most valuable companies in the world sell software products, smaller firms that sell access to SaaS products are often unprofitable and unable to truly demonstrate operating leverage.