The S&P 500 broad market index has performed extremely well in 2019. Gaining almost 30% last year, it was the strongest performance since 2013. In 2013 the market gained about the same sub 30% return from the previous year. If you were to find a similar performance earlier than that, you would have to go back to 1997. In 1997 the market rose just a few percentage points above 30% compared to the previous year. Despite the extraordinary performance in the broad market, the IPO performance did lag this year. Some well looked after companies such as Uber or Lyft saw their shares plummet significantly. However, some smaller companies have been able to post significant gains after their IPO…
With 2020 now underway, a new wave of companies is planning to go public this year, hopefully, with more success than last year. Some of these companies have already filed their forms with the US Securities and Exchange Commission (SEC). Others have already filed confidential data with the SEC for their IPO’s. And yet others, so-called unicorn companies (with a private market valuation of over $1 billion) are highly anticipated to come public soon.
2019 has seen the number of IPO’s actually decline from the previous year. In 2018 there were 192 IPO’s versus 159 IPO’s recorded in 2019. Stock market investors want to see more companies going public.
In this article, we are going to take a look at the top 10 most anticipated IPO’s for 2020. These will involve long-anticipated IPO’s of companies such as Airbnb, Robinhood, and others that have been planning on going public for some time now. Hence, it is not a list of companies that are going public this year, but rather of the hottest firms that investors would like to see going public.
Airbnb is an online marketplace that connects people who want to rent out their homes with people who are looking for accommodations in that location. Currently, it covers more than 100,000 cities and 191 countries worldwide. The strength of the Airbnb business model lies in its competitive pricing, the unique user experience, and its huge global presence. Investors have long been asking for the company to go public, and in 2019 Airbnb finally announced it was planning an IPO in 2020.
While 2019 figures are still highly anticipated, in 2018 and 2017 Airbnb posted a profit. During the early years, the company reported healthy growth rates of 150% to 300%. In 2013, nearly 250,000 properties were added to Airbnb. Since then, its revenue started growing at an incredible pace. It recorded a 1000% growth in revenues between 2013 when it was $250 million, and 2017, when it reached $2.6 billion. However, despite its impressive growth, the company faces some uncertainty. Inside turnover and lawsuits have been something the company was battling for a few years now.
The company was reportedly valued at $32 billion in 2017. During the second quarter of 2019, the company said it had generated “substantially more than $1 billion” in revenues. It has also expanded with experiences and boutique hotels. It also added to its “most wish-listed homes” that you can rent around the world.
Airbnb’s biggest home-sharing competitors are HomeAway, VacayHero, and HouseTrip. However, Airbnb’s presence outweighs any of these companies, and none of them have released an initial public offering. While there are many similarities between Airbnb and other companies offering home-sharing services, it remains the frontrunner in the market. In total it has 53 investors, of which 12 are lead investors and from which it has raised $4.4 billion in funding.
Robinhood is an online company that offers brokerage services to its clients. Primarily, this is done via the Robinhood app. The company has been around since 2013. However, it has started making headlines only in recent years. Robinhood was one of the first brokers to offer a zero-fee trade policy to its customers. As a result, many have flocked to use the company’s services. Additionally, many other brokerages have followed suit with the zero-fee trade policy.
The company has seen tremendous growth in the last few years. In the summer of 2018, the company reportedly had around 4 million users. By the end of the year, this number has jumped by 50%, to 6 million users. While currently, according to Forbes, the company has over 10 million users. In the summer of 2019, Robinhood received additional financing for its business operations. That put its valuation to around $7-$8 billion dollars.
The company is still to file with the SEC to show their concrete intent of going public. However, there has been lots of talk on Wall Street about what the future of this company could hold. One of the larger specifics of the company is that its user base is mostly the members of the younger generation. That is, the Millenials. Hence, it is logical that the company will have to find ways to keep attracting them. That said, however, many brokers have also adopted a zero-fee trade policy, and it is going to be not easy to do that amongst all the competition.
Founded in 2011, Postmates is an on-demand delivery company. Postmates employs couriers to pick up and deliver products from a variety of businesses. They range from the likes of restaurants, convenience stores, retail stores, and more. Through an online Postmates app, folks can get anything from food, clothes to even tech products delivered to their doorstep from local stores if that business is a partner with Postmates.
Since its launch, Postmates has become incredibly popular. It makes well over 5 million deliveries per month and has a presence in 3,500 cities across all 50 U.S. states. Postmates also reported that it currently works with over 500,000 restaurants as well as companies such as Apple, Wallmart, and others. This has translated into a big boost in revenues. Postmates’ revenue was $400 million in 2018, up 60% from 2017’s $250 million.
The company has raised a little over $681 million from companies like Blackrock, Spark Capital, Tiger Global, Harmony Partners, Founders Fund, and GPI Capital. Celebrities such as Kevin Durant have also taken an interest in Postmates. He reportedly invested $1 million into the company and even helped promote it. These investments helped propel the valuation of the company to $2.4 billion. Once the firm goes public, it could soar even higher.
The company expected to go public in 2019. However, due to choppy market conditions, and a hostile environment for growth-focused companies, it called off their plan to go public. However, the company still has these plans at hand, whenever they see the market conditions get better.
A big uncertainty for investors should be Amazon, which has taken the delivery service sector by storm. Companies such as FedEx have already felt the impact on their bottom like.
#4 Ant Financial
Ant Financial Services Group, formerly known as Alipay, is an affiliate company of the Chinese Alibaba Group. Ant Financial is the highest valued FinTech company in the world. It is also the world’s most valuable unicorn company with a valuation of $150 billion. Ant Financial operates Alipay, the world’s largest mobile and online payments platform. Additionally, it provides online investments and other related services to hundreds of millions of consumers. As of recent, the company now plans to sell in-house expertise to the same banks and help them digitalize their operations with tools such as cloud computing and data analytics.
As of the current moment, the company has not revealed any plans of going public just yet. However, investors have been buzzing about the company for quite some time now. One of the largest attractions to the company is its mobile payments platform that operates within China. It seems unrealistic that any US company could break into China’s mobile payments industry. At the same time, this company would offer a vehicle for that type of investment, which makes it so exciting for U.S. investors.
WeWork was one of the most anticipated stocks in 2019. Having announced its plans for IPO in 2019, it later formally filed a request to withdraw its registration statement with the SEC. In other words, it no longer plans on going public. The reasons for the turnaround were simple. Bad press basically plagued the company. Analysts have cut its valuation over the course of 2019. In addition, there even was speculation that the company could run out of money. With all of this going on, the company decided to wait for better times. Whether these will come soon, we are about to see. However, that does not take away from the fact that WeWork is still one of the most anticipated IPO’s.
The company basically rents out co-working office spaces for startups, freelancers and enterprises. It does that in some of the most expensive markets out there. WeWork makes its money through rent or membership payments that these companies and individuals make.
Founded in 2010, the company has expanded significantly over the last decade. In its recent SEC filings, the company boasted around 528 locations in 111 cities across 29 countries. It had almost 40% of the enterprises in the Global Fortune 500.
Soon after the announcement of the company going public, one brokerage house valued the company at $100 billion. Whereas by the time the company has changed its mind, some estimates were as low as $10 billion. However, regardless of its underlying troubles, the company might still have to raise capital via an IPO.
Snowclake Inc is a cloud-based data-warehousing startup that was founded in 2012. Snowflake offers cloud-based data storage and analytics service. It allows corporate users to store and analyze data using cloud-based hardware and software. Its Snowflake Data Exchange allows customers to discover, exchange and securely share data.
Snowflake has enjoyed continued growth in the last 12 months. Revenues were up 237%, employee count doubled to 1,400, and Snowflake quadrupled the number of new customers bringing its total to about 2,400. In October 2018, Snowflake raised another $450 million valuing the company at almost $4 billion. The company is said to be taking business from competitors such as Teradata and IBM. Despite fierce competition from them and giants such as Amazon and Microsoft in the field, the company is able to grow significantly.
The data warehousing market is growing at around 8.2% annually, according to Allied Market Research. Its 2023 market size is forecasted to be at around $35 billion. With this amount of growth and competitive advantage, Snowflake is expected to take a big piece of the pie. Additionally, investors should follow public companies such as Teradata for insights into how well an IPO could perform from Snowflake. Teradata’s stock is down 65% from its August 2012 high.
All this, however, does not rule out the possibility of…
Continue reading at TRADIMO.com