While IPOs were at a virtual standstill for much of the first half of 2020 because of the coronavirus pandemic, there has been quite an influx of companies aiming to go public amid the stock market’s rebound.
One of the big factors fueling IPOs is that venture capital markets have been flush with cash for the past ten years or so. They have poured that cash into thousands of startups, which has allowed them to quickly scale. The next logical step: The IPO, which provides still more capital and gives VCs, founders and employees a way to cash in. Not to mention, it brings opportunities for brave investors seeking to get in on the ground floor of the next Amazon or Apple.
Thanks to pushes from the likes of online brokerage Robinhood, trading stocks has become free (or much cheaper) for most investors. That has helped inspire larger numbers of young investors looking for high-growth opportunities, like IPO stocks. In light of this, it seems like a good bet that the momentum will continue for initial public offerings.
There is a laundry list of upcoming IPOs as a host of companies plan on tapping Wall Street for much-needed capital. In this article we’ll highlight a few of the most noteworthy IPOs currently in the wings.
Bumble / expected in early 2021
Bumble is a unique dating app focused on empowering women, who are solely responsible for making the first move in starting connections. Bumble is one of the most popular dating apps in the U.S., second only to Tinder. Although many dating app users, especially women in the 28-33 age group, prefer Bumble for the higher quality experience. Bumble has reached more than 100 million users in 2020, and it monetized those users via advertising, as well as a premium subscription option.
The dating app space is challenging. “The biggest risk is of course competition namely Tinder,” says David Drea, a financial advisor with Morgan Stanley Wealth Management. “Tinder is the biggest rival and has a stronger household name. However, I can see these two being the one-two punch of the online dating world. Other smaller apps just can’t compete with both of their models.”
The timeline for IPO appears to be early 2021, according to a Bloomberg report. The estimated $6 billion to $8 billion valuation would make it one of the hottest upcoming IPOs for 2021.
Instacart / expected in the first half of 2021
Instacart is an on-demand network for delivering groceries and other products. The emergence of COVID-19 has spurred millions of people to adopt app-based delivery services and has been a game changer for the company.
Instacart has a sophisticated logistics system, which involves agreements with more than 400 retailers spanning over 30,000 stores. That network translates into a reach of about 80% of U.S. households and 70% in Canada.
Instacart has still been busy raising funds, including a $200 million round from Valiant Peregrine Fund and D1 Capital Partners, following a $225 million raise in June led by DST Global and General Catalyst, with D1 participating. But Financial Times reported in early October that the company was consulting with banks ahead of a potential IPO, expected sometime in the first half of 2021.
While there’s no hard estimate on an IPO valuation, the latest round values the company at $17.7 billion, which means the Instacart IPO should be one of the largest of 2021.
ThoughtSpot / expected Fall 2021
ThoughtSpot produces business-intelligence analytics search software whose platform allows organizations to integrate myriad sources of data and to set up sophisticated dashboards. Some of the companies who use ThoughSpot include Hilton, Walmart, Hulu and DeBeers.
The analytics market has seen plenty of dealmaking over the past couple of years, paving the way for an IPO like ThoughtSpot. The highlights include Salesforce.com’s (CRM) whopping $15.7 billion buyout of Tableau in summer 2019, and Alphabet’s (GOOGL) $2.6 billion acquisition of Looker around the same time.
While there are no firm estimates on a possible IPO valuation of ThoughtSpot, its last round of funding was a Series E in August 2019 in which it raised $248 million at a valuation of nearly $2 billion. The IPO is expected to take place in the Fall of 2021.
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