August 18, 2021
To say that the IPO market is still hot is, at this point, probably a bit of an understatement. During the last week of July 2021 alone, 20 new stocks began trading on the Nasdaq and New York Stock Exchange. To put that into perspective, that’s the most in a single week at any point since 2000. This high level of IPO activity comes off a record 2020 in which more than 400 companies went public – double that of 2019.
With that in mind, here are a few potential IPOs worth keeping tabs on.
Discord launched in 2015 as a communications platform used by online video gamers to connect via instant messaging, audio, and video chats. But the platform has since entered the mainstream with influencers and celebrities maintaining presences to connect with Discord’s estimated 250 million registered users and more than 140 million monthly active users. Discord’s popularity contributed to tech giant Microsoft Corp. (Tii:MSFT) entering talks to buy the platform at an estimated $10 billion valuation. However, these talks ended with Discord management deciding to remain an independent company. Though this is a greatly anticipated IPO, the company has yet to announce when or if it will go public. However, analysts are expecting an announcement this year.
The explosive growth in e-commerce spending over the last few years – particularly in 2020 – resulted in greater interest in businesses that are part of the economic infrastructure of the internet. Payment processing platform Stripe handles billions of dollars in transactions per year for some of the largest corporations in the world. The fintech firm currently has a mind-blowing $95 billion valuation after raising $600 million in its most recent financing round. This valuation and the red-hot industry in which it operates make Stripe’s IPO one of the most awaited and potentially one of the largest of the year.
While the major automakers are pledging to go all-electric within the next decade or two, electric vehicle manufacturers are jumping into the marketplace as consumer interest for viable alternatives to fossil fuel-burning automobiles continues to climb. Founded in 2009, Rivian Automotive is a California-based manufacturer of electric SUVs and pickup trucks that attracted the attention of e-retail giant Amazon.com Inc. (Tii:AMZN), which led a $700 million investment round in 2019. In addition, Amazon pledged to buy 100,000 vehicles for its delivery fleet and began testing Rivian’s electric delivery vans in San Francisco earlier this year. Rivian, which closed a $2.5 billion private funding in which automaker Ford Motor Company (Tii:F) participated, has raised $10.5 billion since 2019. The company’s IPO is expected to occur at some point during the remainder of 2021.
Finally, we have InstaCart, an online grocery delivery business that helped revolutionize how we lived – and remained safe — during the pandemic. Rather than going out to the grocery store, more than 750,000 shoppers used the app last year to order their groceries. The company introduced “Priority Delivery” earlier this year, offering grocery delivery as fast as 30 minutes for customers across the U.S. and Canada. With a recent valuation of $39 billion, InstaCart’s anticipated 2021 IPO should be one of the year’s hottest. However, reports of food delivery platform DoorDash Inc. (Tii:DASH) in talks to acquire InstaCart for an estimated $40-$50 billion, the online grocer could be snatched off the market before going public.
Time will tell if these highly anticipated IPOs come to pass or whether their share prices meet expectations once they begin trading. But coming off a strong 2020, continued investor interest, and a robust pipeline of innovative companies, the IPO market is shaping up to be another banner year.
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