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The stock-market debut of Twilio Inc. marks a big test for the dozens of technology companies that have been valued at more than $1 billion in private fundraising.

The offering of the San Francisco-based company, which is expected to price after the market closes Wednesday, comes during a tough patch for younger, private technology companies as some of their valuations in private fundraising rounds have fallen in recent months. It also comes as U.S.-listed IPOs are on track for their worst year since the financial crisis.

Many investors from Silicon Valley to Wall Street are for that reason watching to see where Twilio prices its offering. The company last sold shares to private investors at $11.31 a share, according to a regulatory filing, valuing the company at about $1 billion, and those investors will want to see Twilio price shares trade above that level.

So far, things are looking good for Twilio, people familiar with the offering say. Twilio shares are expected to price at the high end, or slightly above, the $12 to $14 range the company is targeting, according to money managers who were considering the deal.

If it prices at its midpoint of $13 apiece, Twilio would have a market capitalization of $1.1 billion, more than what it was valued in its previous financing round.

Twilio, which enables developers to build and operate real-time communications within software applications, counts as customers Uber Technologies Inc. and HubSpot Inc., among others.

"The product has absolutely revolutionized how apps can be built and revolutionized how apps can be used," said David Rudow, a senior equity research analyst at Thrivent Asset Management, who has met with Twilio management previously and is looking at the IPO.

As one of only a few tech IPOs in 2016, he added that even if he doesn't participate he will be watching to see how it prices and trades.

Even if Twilio pops on its first day of trading and remains in positive territory, few expect it to be a catalyst for a rush of tech IPOs in what has been the slowest year for U.S.-listed tech IPOs—and IPOs in general—since 2009, according to data from Dealogic.

Jeff Clavier, a managing partner at SoftTech VC, said Silicon Valley will be watching Twilio's trading activity this week and rooting for it, but "it's too small to be a huge bellwether for everyone."

Mr. Clavier, who was an early investor in one of 2015's highly anticipated IPOs, FitBit Inc., added, "The advice from most bankers is hang out and wait til 2017 for a better market."

Some analysts and money managers looking at the IPO questioned how much Twilio can grow.

Last year, one customer, WhatsApp Inc., accounted for 17% of Twilio's revenue, according to a regulatory filing. Concerning some analysts is that WhatsApp "has no obligation to provide any notice" to Twilio if they choose to stop using Twilio's services entirely, meaning that 17% of revenue could drop to zero without advance notice, the filing showed.

A spokeswoman for Twilio declined to comment.

What could help Twilio's offering is that T. Rowe Price Associates Inc. is named in the prospectus as a current shareholder that has indicated an interest in purchasing up to 1.5 million shares of Twilio's IPO.

In recent years, many tech companies have steered clear from the public markets, in part because they were able to easily raise money at high valuations in private fundraising rounds, an environment that analysts and investors have said could be changing. Indeed, mutual funds that hold shares of private companies have marked down some of these holdings, including T. Rowe Price, which in the first quarter marked down many of its investments in private technology companies, including Uber Technologies.

If and when these companies turn to the public markets, investors may value their companies at a lower level than prior financing rounds, analysts and investors warn.

Square Inc., a recent highly anticipated U.S.-listed venture capital-backed IPO, sold shares in its offering in November at a level that was below where they were previously valued by private investors.

Twilio is set to price its IPO on Wednesday night, according to people familiar with the offering, and begin trading on the New York Stock Exchange under the symbol "TWLO" on Thursday. Twilio's first few days of trading could be volatile for stocks, as U.K. voters are set to decide whether to leave the European Union on Thursday.

Maureen Farrell contributed to this article.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

June 22, 2016 11:05 ET (15:05 GMT)

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