10 Hot Upcoming IPOs to Watch in 2022

Last year was the year of the initial public offering. Wall Street set records with both the number of IPOs that hit markets — more than 1,000 — and the total amount raised, which exceeded…

$300 billion and smashed the previous annual record by more than 50%. A horrendous start to the trading year makes 2022’s environment far more hostile to hot upcoming IPOs, but there are still a handful of elite privately owned companies primed for a debut on one of the major exchanges by year’s end. Here are 10 of the most anticipated upcoming IPOs to watch for in 2022.

Discord

Named by U.S. News as one of the top upcoming IPOs to watch in 2022 back in December, the popular social messaging app hasn’t yet confirmed a move to go public, but more and more signs are pointing to a move to tap public markets. In March, Bloomberg reported that Discord was interviewing investment bankers to prepare to go public, indicating that a formal announcement could be imminent. The company is reportedly considering a direct listing. Discord, which surged in popularity during the pandemic and enjoys a strong brand and cult-like user base, is a popular communication tool in the gaming and cryptocurrency communities. Confident in its ability to keep growing, Discord turned down a $12 billion buyout offer from Microsoft Corp. (ticker: MSFT) last year. In September, the company raised $500 million at a $15 billion valuation.

Potential 2022 IPO valuation: $15 billion

Reddit

Popular social media and message board website Reddit filed confidentially for an IPO in late 2021, giving good indication that it would be one of the biggest upcoming IPOs in 2022. Reddit’s valuation has gone parabolic in recent years, with private financing rounds valuing the company at $3 billion in 2020 and $10 billion in 2021. Late-stage private investors always bet that an eventual IPO will bring substantial upside, and when Reddit picked Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) as lead underwriters for its initial public offering in January, Reddit was said to be seeking a public valuation of more than $15 billion. Given the rough start for tech stocks in 2022, it’s possible that Reddit and Discord will have to compromise on their ideal valuations, but time will tell.

Potential 2022 IPO valuation: $15 billion

Instacart

Instacart, like Discord, ended up benefiting from pandemic-era lockdowns and the subsequent work-from-home economy that largely continues into 2022. The grocery delivery app onboarded tons of new users in 2020 as people isolated, masked up and even wiped down groceries that were left at their doorstep. The company’s revenue reportedly more than tripled to $1.5 billion in 2020, but there’s been an expected slowdown in growth as consumer behavior has steadily normalized. Still, the company’s long-term growth trajectory was massively accelerated, and despite steep competition from Amazon.com Inc. (AMZN) and Uber Technologies Inc. (UBER), Instacart remains one of the hottest private companies yet to tap the public markets. It pushed back plans to go public last year as it focuses on expanding its business to areas like digital advertising.

Potential 2022 IPO valuation: $39 billion

Databricks

It’s rare for companies to achieve valuations of more than $30 billion without IPO chatter, and cloud-based data storage and analysis company Databricks is no exception. While the company hasn’t yet announced public money-raising plans, it’s easily one of the hottest investments in the world of venture capital. The high-tech firm, whose services use artificial intelligence to sort, cleanse and present Big Data for customers, raised $1.6 billion at a $38 billion valuation last year from investors that included Bank of New York Mellon Corp. (BK) and the University of California’s investment fund. Unfazed by the market beatdown peer Snowflake Inc. (SNOW) has taken — the Warren Buffett holding is off about 50% in 2022 through mid-March — CEO Ali Ghodsi said earlier this year that the company’s “growth rate will break through the multiple compression that’s happening in the market” if and when Databricks goes public.

Potential 2022 IPO valuation: $38 billion

Chime

Another fast-growing private company is financial technology, or fintech, leader Chime, a digital bank catering to average people looking to save a dollar. Unlike traditional banks, which make small fortunes on low-income and financially uneducated customers via monthly fees, overdraft charges and account minimums, Chime is going for the mass market by ditching such revenue streams. Chime’s private valuation soared from…

 

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