Keep in mind that this generation of startups is delaying IPO as long as possible. The main reason appears to be a desire to delay public company reporting requirements, not a lack of capital needs. Since the IPO market remains strong, a set of new investors has entered the market to play this "public/private arbitrage" opportunity, buying private stock shortly before IPO for apparently* sure gains. This group of players includes hedge funds (Tiger Global), mutual funds (TROW), and private equity funds (TPG). Traditional growth-stage funds are starting to pull back as this competition is pushing up valuations. Note that the arb players are betting on near-term market reception to the stocks that they are buying, and less sensitive to absolute valuation. Without commenting on current valuations, I will say that these dynamics certainly have the potential to create significant overvaluation in the private markets.
* I call them apparently safe gains because if the IPO market collapses, these investors will be stuck with some very large, illiquid investments.
That's the straightforward reason, but it doesn't sound big enough to me.
First, AirBnB just got valued at 10bn. FB's IPO broke valuations records. Reporting requirements are a drag and I'm sure they impact IPOs on the margin, but 10bn is not marginal. Reporting for a company like AirBnB is not that hard. They have a straightforward business model with one business. It's not like they have 50 years of hair, cross ownership, JVs and zombie businesses.
Second, FBs timing indicates (to me) that something else is going on.
Third, WTF is the reason for these arbitragers. Arbitrage requires a willing seller. Why raise capital (sell shares) at a lower cap 9 months before an expected IPO?
* I call them apparently safe gains because if the IPO market collapses, these investors will be stuck with some very large, illiquid investments.