Line makes public debut — who’s next?

Line (Tokyo Stock Exchange: 3938.T-JP)'s debut on the New York Stock Exchange has investors asking: which private tech companies will follow in the messaging app's footsteps?

There are four tech companies that have filed for an initial public offering but have yet to go public, according to CB Insights: Talend, Impinj, Nutanix and Tabula Rasa Healthcare.

Additionally, there are reports that Coupa Software and Okta have hired investment banks to explore an IPO.

These companies declined to comment, but what connects them is that they're all business-to-business focused. Venture capitalists say that means they're more likely to boast financial metrics that public market investors would appreciate such as high growth, recurring revenue and lower cash burn.

"They're subscription businesses with proven business models where revenue recurs every month, every year and it's easier for them to control their costs than many consumer companies," said Dan Scholnick, general partner with Trinity Ventures.

As for those consumer-facing companies, powerhouses like Uber and Airbnb are in no rush to go public. Both companies can and do raise boatloads of money from private investors.

Meanwhile, other on-demand start-ups might be wary of testing the public markets because they're still losing money on every transaction, and don't have pathways to profitability.

Line's decision to go public is a rare one. By this time last year, there had already been 14 tech IPOs, which raised $2.5 billion, according to Kathleen Smith of Renaissance Capital, an IPO-focused ETF manager.

Line is only the fifth tech company to hold an IPO in 2016. The other four — Twilio (NYSE: TWLO), SecureWorks (NASDAQ: SCWX), Acacia Communications (NASDAQ: ACIA), and China Online Education Group (NYSE: COE) — raised a total of $411 million.

Still, those four newly minted public companies have generated an average return of more than 50 percent.

"Strong returns are the fuel that powers the IPO issuance engine," Smith told CNBC.

Indeed, venture capitalists like Scholnick expect that tech IPO pipeline to pick up. That's because more start-ups will have to turn to public markets for funding, he says, as private markets cool.

And there's another reason Scholnick says investors should expect more tech IPOs: His colleagues on Sand Hill Road want to enjoy actual cash returns on their investments.

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