Goldman Sachs promotes two veterans to run global tech group as Nick Giovanni leaves for Instacart

Goldman Sachs is coming off a banner year in tech investment banking, and now has to call on new leadership to keep up the momentum.

The bank on Thursday promoted Sam Britton and Matt Gibson, two company veterans, to run its global tech, media and telecom group after Nick Giovanni, who ran the team for two years, left to become CFO of Instacart.

In a year that included three of the 10 biggest IPOs ever for U.S. tech companies and the second-largest software acquisition on record, Goldman advised on all of them. The bank led overall in tech IPOs and mergers and acquisitions, beating Morgan Stanley and JPMorgan Chase in both categories.

There’s no slowdown in sight, with online lender Affirm and gaming company Roblox on file to go public, along with cloud software vendor Qualtrics, which is spinning out of SAP. Goldman is leading the Roblox deal and listed second to Morgan Stanley on Affirm’s prospectus. Instacart is among a lengthy list of additional tech and internet companies expected to debut at some point in the year.

Gibson, a 20-year Goldman veteran who’s been co-leading investment banking client services since 2017, said the low interest rate environment coupled with the ongoing outperformance of technology stocks makes the sector particularly attractive to investors.

“If what you’re looking for is growth, some people are willing to overpay for it right now,” said Gibson, who has a house in Chicago and said he’ll be spending much of his time between New York and the Bay Area. “Valuations that we see right now are towards the upper end of what the historical trends have been.”

While Gibson, a former Navy officer, has spent the last few years working with clients across a variety of industries, Britton has been at the center of the tech action, running Goldman’s tech M&A group.

In December, Britton’s group advised Slack on its $27.7 billion sale to Salesforce, a deal only surpassed in the software industry by IBM’s $34 billion purchase of Red Hat, announced in 2018. Britton also had a lead role in the three largest tech deals of 2019, including Salesforce’s $15.7 billion purchase of Tableau.

Britton, who joined Goldman 24 years ago and is based in San Francisco, will now be co-leading the entire 300-plus-person global tech group, which includes 25 partners.

“It’s radically different from when I started,” said Britton, adding that the team had a total of 35 people when he joined. “It’s clearly one of the most important platforms for the division and the firm.”

While Goldman has a healthy pipeline of upcoming tech IPOs, the firm also has the challenge of managing a whole new set of demands from companies lining up to hit the market. The three biggest tech IPOs of 2020 — Snowflake, Airbnb and DoorDash — all had surprisingly large pops on day one, reigniting the debate surrounding how deals get priced and why so much money is being left on the table.

Roblox, which delayed its debut last month after seeing Airbnb and DoorDash get mispriced, said Wednesday that it will now go public through a direct listing, following the lead of Spotify, Slack and Palantir. Roblox also raised $520 million in private capital ahead of its debut.

In addition to direct listings, companies are considering hybrid auctions and special purpose acquisition companies, as they look for the most efficient and, in many cases, cost-effective way to go public.

“The biggest change is just the evolution of the IPO market,” Britton said. “It really has happened in the past couple years. I expect that change in the IPO process and the number of options clients have to continue to expand.”

— CNBC’s Deirdre Bosa contributed to this report.

WATCH: Tusk Ventures CEO Bradley Tusk on the red-hot IPO boom of 2020