2020 was a devastating year to many. Medically, we experienced the COVID-19 global pandemic. Still, it was also the year that we saw a record number Initial Public Offerings (IPO) with more than 400 companies listing in the U.S. stock exchanges, with some of them offering returns two-fold on their debuting day. From the looks of the IPO calendars, 2021 is looking to be no different. With global economies on a recovery track and government stimulus flowing in, along with increasing revenue and technology adoption. We are poised for another similarly big year for initial public offerings. Some of the most innovative companies in tech over the past 10 years are positioned to make an entrance in public markets. Here are some of the most anticipated IPOs investors should look out for in 2021.
Instacart is an American company that offers grocery pick-up and delivery in the U.S and Canada. Its services are provided on the web and through a mobile app that allows customers to order grocery products from participating retailers, with the help of personal shopper.
Instacart experienced a growth spurt in March 2020, with the emergence of social distancing rules and economic shutdowns, due to COVID-19 as more people were forced or opted to shop online. Data from Apptopia shows that Instacart daily downloads surged by 218% during the initial lockdown period in 2020. Instacart recently raised $200 million in October 2020, with an implied valuation of $17.7 billion. Later, the company surprised investors by announcing its in talks with Goldman Sachs to go public at a valuation of $30 billion in early 2021. Instacart is poised to potentially be worth more due to its massive adoption and continued growth in the long term.
Bumble is a location-based dating and social network application that facilitates communication amongst interested users of all genders. It empowers women to make the first move in heterosexual matches. While in gay or same-sex matches, either party can initiate contact. Bumble was founded by Whitney Wolf Herd, soon after she left her co-founding dating app Tinder. Bumble’s initial launch was in December 2014.
On December 18th, 2020, Bloomberg reported that Bumble confidentially filed for an IPO and was seeking a valuation of $6 to $8 billion. The company aims to complete the initial offering in February 2021. The S- 1 was released on January 15th, 2021, to the public.
Coinbase is a digital fiat and cryptocurrency exchange, offering its trading services in more than a hundred countries with its headquarters based in San Francisco, California, founded in June 2012 by Brian Armstrong and Fred Ehrsam. The exchange brokers offer trading, buying and selling, and storing popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Tezos. Coinbase is currently the largest crypto exchange in the U.S by volume.
Coinbase is reportedly expected to make its IPO in early February 2021. The IPO news has been fuelled by the growing interest and demand of popular cryptocurrencies, such as Bitcoin, from investors and institutional investment firms like Grayscale and BlackRock. The exchanges’ earlier valuations differ broadly, but the crypto market analyzing company Messari valued the exchange platform at 28 billion in 2020. Though recent reports estimate the exchanges’ market value to as high as $75 billion, its final valuation for IPO will be determined after investors get the opportunity to go through its financial records as they are currently undisclosed. Should the exchange debut its IPO in a lower and affordable price range, its stock could entice short and long-term investors.
Qualtrics is an enterprise software company that sells software to businesses to gauge how clients use their products to improve quality. The company was co-founded in 2002 by Ryan Smith, Scott Smith (father), and Jared Smith (brother) in Provo, Utah.
In its IPO filing, Qualtrics hopes to sell its shares at $22-$26 each with a valuation of between $12 to $14 billion. It plans to go live with its IPO on January 28th, 2021. It had initially planned to go public in 2018, but SAP acquired the company for $8 billion.
Roblox is an online gaming developer and platform that enables users to select and play from millions of games created by other users. The platform, founded by David Baszucki and Erik Cassel in 2004, was released in 2006. The platform currently has over 150 million monthly active consumers and is very popular with children. Its more popular games are currently MeepCity, Welcome to Bloxburg, and Adopt Me, amongst others.
The company filed to go public in November 2020, hoping to finalize the plans before the end of 2020, but later decided to push the IPO to early 2021 to elevate its IPO funds and valuation. The company valuation is expected to be around $29.5 billion in 2021.
Stripe is an American company that offers payment processing for digital payments. The company is headquartered in San Francisco, California, with another major hub in Dublin, Ireland. Its application programming interface (API) allows web developers to integrate online payment functionalities into their websites, mobile apps other internet-based services. The company was founded by Irish brothers Patrick and John Collison in 2010.
Stripe has over a million customers varying from start-ups to corporations, including Lyft, Amazon, Shopify, Doordash, and Uber. It is a privately-owned company, and there are no indications of an IPO anytime soon, however speculation has been amounting for a 2021 public debut. Bloomberg reported that the company is in negotiations for additional private funding at a valuation of $70 billion.
Gitlab helps developers with services such as code sharing, continuous integration, and deployment issue-tracking. The company was founded by Ukrainian developers Valery Sizov and Dmitri Zaporozhet and launched in 2014. The headquarters are in San Francisco and the company serves users worldwide. Its direct competition is GitHub, which was acquired by Microsoft for $7.5 billion in 2018.
In 2019, the company raised over $250 million in a round led by Goldman Sachs and Iconiq Capital. Gitlab allowed employees to sell shares on secondary markets in 2020. The valuation during the sale was over $6 billion. The secondary share sale allowed employees to get liquidity ahead of the public debut, which is expected 2021, although this has not yet been officially confirmed by the company.
Robinhood is a company based in Silicon Valley. This start-up changed online investing by offering commission-free trades to the masses through a user-friendly mobile app and website. The company provides a platform to invest in stocks, ETFs, Bonds, cryptocurrencies and options. It is popular with young and novice traders. The company is headquartered in Menlo Park, California, and was founded in 2013 by Baiju Bhatt and Vladimir Tenev.
The Robinhood IPO date is unknown currently, though there is speculation that it will be sometime in 2021. Acording to the NY Post, the company has hired the banking giant Goldman Sachs to advise on an IPO. The trading platform added 3 million new customers in early 2020 and reported 4.3 million DARTs (daily average revenue trades) in June, outdoing every other publicly traded broker. The company experienced record investments in 2020 amid the COVID-19 pandemic. The recent valuation in August 2020 valued Robinhood at around $11.2 billion.
Sofi or social finance is an American online finance company based in San Francisco, California. It’s a mobile and web financial products provider offering various financial products, including personal loans, student loan refinancing, mortgages, wealth management and credit cards. The company was founded in August 2011 by four Stanford Business School graduates, namely Mike Cagney, James Finnigan, Ian Brady and Dan Macklin, with the headquarters in San Francisco, California.
On January 7th, 2021, Sofi announced it would merge with the SPAC (Special Purpose Acquisition Company) Social Capital Hedosophia V (IPOE). The estimated valuation of Sofi at the time of merger will be $8.7 Billion. The merger is expected to be completed within the first quarter of 2021.
Nextdoor is a neighborhood social networking site for establishing trusted local connections and exchanging local, relevant and helpful information. The platform helps users find recommended providers within the local community. This micro-network effect helps improve reliability and trust of reviewed local products and services. It was founded in 2008 by Nirav Tolia, Prakash Janakiraman, Sarah Leary and David Wielsen. The service was launched in the U.S. in October 2011. The company currently offers services in 11 countries.
The app has gained a healthy chunk of the social media market share. It is seen as a more useful and safer avenue than rival competitor Craigslist. Nextdoor members use their real addresses and names, thereby giving the site credibility. The IPO date is expected to be sometime in 2021 if everything goes as planned. The company is expected to soon release details on the numbers of shares, price, ticker symbol, exchange and financial history. Analysts expect the IPO to be in the vicinity of $5 billion. Nextdoor was valued at around $2.2 billion at its last funding round in September 2019.
Chime is an American electronic app-based challenger bank that has revolutionized the way millennials control their money. The company offers fee-free financing, doesn’t charge monthly and overdraft fees and has no physical branches. It makes revenue from interchange fees every time clients swipe their debit cards. According to a CNBC report, 2020 Chime boasts of more than 8 million customers and a $14.5 billion valuation, as of September 2020, making it one of the more valuable Fintech companies. It was founded in 2013 by Chris Britt, and its headquarters are in San Francisco, California.
Chime is part of the several fintech companies that are riding the financial waves of mobile technology success along with fintech peers such as Stripe and Robinhood. According to CEO Chriss Britt, the company will be “IPO ready” in 2021.
Rivian is an American electric automaker and technological automotive company. The company focuses mainly on electric SUVs, pick-up trucks and delivery vans. It was founded by Robert R.J. Scaringe, an MIT graduate in Mechanical engineering in 2009. Its headquarters are in Plymouth, Michigan. Rivian competes with Nikola, Lucid Motors, and Tesla for market share in the growing sector of Eco-friendly electric motors. With the industry poised for disruptive growth in the coming decade, the company has hopes of gaining substantial market share.
It is privately-owned, with shareholders being employees, early investors and large corporations. In an interview, Rivian CEO and founder Robert Scaringe on November 2020, said that the company is centered on product and back-end operation for the coming year, indicating that the company has no immediate plans to IPO in 2021. The company’s valuation is at $27.6 billion after it closed a new round of funding on January 19th, 2021, according to reports by TechCrunch. It is one of the most awaited upcoming IPO offerings in the electric vehicle space.
#13: Lucid Motors
Lucid Motors is an American automaker specializing in electric vehicle (E.V.) manufacture and production. The company plans to enter the market of environmentally friendly luxury sedans, and has made a name for itself due to its technology that increases the range of battery performance. Bernard Tse and Sam Weng founded the company on August 22nd, 2007 initially as Atieva, focusing on batteries and powertrains, and rebranded later in 2016 to develop electric vehicles. The company headquarters are in Newark, California.
Lucid Motors is on course to go public via a SPAC called CCIV (Churchill Capital Corp IV,) according to a report by Bloomberg on January 11th 2021. When using a SPAC to go public, a company eliminates the need to do an IPO, allowing it to offer its shares more quickly to the public. The E.V. maker has raised over $1 billion in private funding, with the prominent investors being Venrock, Mitsui, China Environmental Fund and Saudi Arabia’s Public investment fund.
#14: Epic Games
Epic Games is an American video game and software developer company based in Cary, North Carolina. The company is best known for its first-person shooter game Fortnite, one of the most popular online games with more than 350 million registered users globally. The company was founded by Tim Sweeney, as Potomac Computer Systems in 1991. Since then, the company has developed over 50 games and has made a number of acquisitions to complement its technologies.
Epic Games is privately-owned with the majority shares (more than 50%) owned by the founder and CEO Sweeney. The other shareholders are early investors and venture capital firms. In its most recent round of funding in August 2020, the company was valued at $17.3 billion. Although there are no explicit indications of Epic Games going public in 2021, investors are on the lookout for a potential IPO.
Acorns is an American financial service and technology company that specializes in micro-investing. It was founded in 2012 by the father and son duo of Jeffrey James Cruttenden and Walter Wemple Cruttenden III. The company is headquartered in Irvine, California. Acorns prides itself of 8.2 million customers and $3 billion in assets under management.
The company partnered with CNBC to offer educational information, promote financial awareness, and expert advice on basic personal finance and investing topics. Due to this dynamic relationship, Acorns forthcoming IPO may receive more airtime coverage than other upcoming IPOS.
#16: Impossible Foods
Impossible Foods is an American company that develops plant-based substitutes for meat. The company’s flagship product is the Impossible Burger sold widely in restaurants and grocery stores. Founded in 2011 by Patrick O. Brown the Company’s headquarters are in Redwood City, California.
The Impossible Foods IPO will be monitored closely after the spectacular success of a similar competing company, Beyond Meat, whose stock price rallied over 100% several days after offering its IPO. Impossible Foods has not confirmed it’s plans to IPO in 2021, although speculators hope the company might reconsider.
Poshmark is a second-hand retail empire, where people post their products and buy from others on the app. Entrepreneurs are establishing entire businesses around sales on the platform. Co-founder and CEO Chandra Manish controls Poshmark, along with his Co-founding partners.
The company had its IPO debut on January 14th 2021.Shares prices doubled from $42 to over $100 on the opening day. Poshmark’s IPO will be in tough competition to its competitor ThredUp though they use different business methodologies. However, there isn’t a clearly stated IPO date just yet.
Founded 2005, UiPath is one of the most distinguished names in automation. They create bots that help companies do seamless tasks such as data entry. UiPath founder and CEO is Daniel Dines and may well be the world’s first “bot billionaire”.
According to Pitchbook, the company has raised over $1.2 billion in funding rounds and has a valuation of $10.2 billion. It is competing against the same service company, Automation Anywhere, and has reportedly picked banks in the build-up to an IPO in the 2nd quarter of 2021.
The company offers a series of Application Programming Interfaces (APIs) that allow other companies to issue cards. The founder and CEO of Marqeta is Jason Gardener. Companies like Visa, Goldman Sachs and Mastercard are some of the company’s investors.
Marqeta has a valuation of $4.3 billion as of May 2020 and managed to raise $527 million in funding, according to PitchBook. The Fintech company is reportedly working with JP Morgan and Goldman Sachs on a 2021 IPO valuing the company around $10 billion.
Databricks is an online platform that offers unified data analytics and cloud services for large scale data engineering and collaboration for data scientists to build predictive A.I. models. The company has seven founders, including CEO Ali Ghodsi.
Databricks has recently raised $2 billion in funding in advance of its expected 2021 IPO. The company is looking at valuations north of $30 billion. They are hoping to ride on Snowflake’s frenzy during its IPO and anticipate investor interest will be high with competitors.
2021 will can be a rewarding for IPO investors, given the number of promising growth companies that will make their public debuts. The list above is a starting point for investors looking into IPOs of companies that have a strong chance of making a splash when the shares are offered to the public. As always, your own due diligence goes a long way into deciding what investments are most suitable to you depending on your risk profile and financial circumstances.