Outlook for the 2022 IPO

When it comes to the 2021 IPO market, this has been an impressive and record year.

As of this writing, according to Renaissance Capital, the market is expected to witness some 375 deals for the year while raising nearly $ 125 billion. This would mean that 2021 would have exceeded the $ 97 billion raised in 2000 during the dot-com boom.

It has been a busy year for companies going public. The Nasdaq continues to be America’s premier stock exchange for tech, consumer, and healthcare IPOs. Nasdaq Chairman Nelson Griggs said this about the strong 2021 year of IPOs and PSPC:

This has been a banner year for initial public offerings in the United States, with many milestones for the Nasdaq including hosting the largest direct listing in history and Honeywell, a Dow 30 company. We are proud to offer companies more avenues to reach public markets and reach investors, and we are continually improving existing methods as well as new innovations through the development of IPOs, direct listings and after-sales service.

In a recent interview on what to expect for the rest of 2021, Renaissance Capital’s Kathleen Smith said:

We expected to end the year with another 100 IPOs… which will be a record compared to anything we’ve seen since the dot-com bubble in 2000, and we think it will be around an additional $ 30 billion raised.

Adding another $ 30 billion to an already strong year for the IPO market would be amazing.

As we expect the 2021 IPO market to end on a high note, it’s time for us to take a look at what’s in store for the 2022 IPO market and a few companies are considering their market debut over the course of the year. of the coming year.

Instacart

Instacart offers its grocery delivery and pickup service in the United States and Canada through its website and mobile app. The company was founded in 2012 and said it has created more than 186,000 grocery jobs and helped increase income for U.S. grocers by $ 6.4 billion.

Over the past year, Instacart has experienced massive growth, mainly due to the coronavirus pandemic and increased demand for its services. People were using Instacart to deliver groceries as concerns and uncertainties about the virus continued to spread. They were afraid or uncomfortable going to stores and didn’t want to get caught up in chaos and panic shopping.

Rising demand for his services helped the company record its first monthly profit in April 2020 – earning $ 10 million. For 2020, it generated $ 1.5 billion in revenue and $ 35 billion in sales.

In March 2021, the company was able to raise $ 265 million, bringing its valuation to nearly $ 39 billion. Instacart estimates that it has around 9.6 million active users and over 500,000 buyers who are the ones who collect a customer’s items.

Instacart has yet to file its IPO documents with the SEC, but as soon as it does, there will most likely be massive investor demand for this IPO. In these IPO documents, the company will need to define how it expects to continue to grow in a post-pandemic world, especially when the company may see a decrease in demand for its services.

Discord

Discord is a software company that offers app-based services launched in 2015. Its services focus on ways for users to communicate with each other through video calls, voice calls, text messages, media, and files. in private discussions. It has become an easy way for friends and gaming communities to communicate with each other, especially during the COVID-19 pandemic.

As of September 15, 2021, Discord raised $ 500 million in a recent fundraiser, bringing the company’s valuation to nearly $ 15 billion, more than double its December 2020 valuation of $ 7 billion. dollars. It reported over 150 million monthly users and was able to generate $ 130 million in revenue for 2020.

Discord makes money from its subscription plans that complement its free core product. The paid service is priced at $ 9.99 per month and offers users enhanced features such as overall emoji usage, improved streaming, screen sharing, and increased download limits, for no more. to name a few. The company also offers a cheaper paid service for $ 4.99 per month that covers a limited selection of what’s offered in its $ 9.99 subscription.

Investors in the company include Dragoneer Investment Group, Baillie Gifford, Coatue, Fidelity Management & Research and Franklin Templeton.

Bandaged

Stripe is an Irish-American company providing financial services and software as a service (SaaS). It was founded in 2010 and has two headquarters in San Francisco and Dublin, Ireland. It processes payments for e-commerce businesses.

The e-commerce industry has taken off in recent years. More and more payments are made online through digital storefronts. And these physical storefronts and restaurants are turning to new ways of processing payments, such as through new point-of-sale (POS) systems from payment companies that make selling and buying easier for businesses and consumers.

According to a report by JPMorgan, “Business-to-consumer e-commerce sales are at $ 744.1 billion, and online sales growth in the United States is expected to reach a compound annual growth rate (CAGR) of 10.2% in 2021. ”There is a lot of growth in this industry and the United States has not even reached its full potential.

Stripe’s latest fundraising round for the company left it with a very impressive $ 100 billion valuation. Not to mention, the large Canadian e-commerce company Shopify (NYSE: SHOP) took an interest in Stripe and invested more than $ 350 million in the business.

Shopify has become one of Stripe’s biggest supporters and one of the company’s biggest payment processing customers.

Earlier this year, Shopify introduced bank accounts and debit cards to its merchants through a Stripe program. These two companies have a cohesive partnership that may continue after Stripe’s public debut. Not to mention, it gives Stripe even more credibility in the ecommerce industry.

Stripe can make money by charging its customers a 2.9% swipe fee plus $ 0.30 for each transaction it processes. Shopify isn’t Stripe’s only reputable customer. Some of the companies that use the Stripe platform include Amazon (NASDAQ: AMZN), Slack (NYSE: WORK), Glossier, and Under Armor (NYSE: UA). On top of that, the company’s early investors include Peter Thiel and Elon Musk.

A Stripe IPO will be one to watch, and it looks like it could be ready to go public in 2022.

Till next time,

Monica savaglia

Monica Savaglia is Wealth Daily’s IPO Specialist. With passion and knowledge, she wishes to open up the world of IPOs and their long-term potential to everyday investors. It does this through its IPO Authority newsletter, a one-stop resource for any IPO. She is also a regular contributor to the Wealth Daily email newsletter. To learn more about Monique, click here.

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