This year’s biggest IPOs are getting ready to go public, while Snowflake (SNOW) and JFrog (FROG) has gone public today, Unity (U) is still one to look at. IPOs of software and tech companies are the most anticipated investments people look for.
Unity (U) IPO
Most investors probably haven’t heard of Unity Software, but many consumers may have unknowingly enjoyed its products indirectly: The company estimates more than half of the 1,000 most popular iOS games were created using its software. As a provider of tools needed to create 3D interactive content, Unity is very apropos of today’s digital age; its software is heavily used by game developers but also the likes of artists and architects. Another Sequoia-backed high-growth startup, Unity plans to raise a little more than $1 billion in its IPO, trading under the ticker symbol “U.”
AirBNB (AIRB) IPO
After planning to file for an IPO in March, Airbnb pushed back its plans as the global travel industry ground to a halt. The company filed confidentially for an IPO in August, putting it on track to go public by year’s end. The short-term rental site appears mature enough to go public; although, revenue reportedly tanked 67% in the second quarter, with the company posting a $400 million loss before interest, taxes, depreciation and amortization. That said, bookings quickly bounced back. U.S. bookings were reportedly higher in the May 17 through June 3 period compared with last year. More financials should be available soon, but the pandemic has certainly hit its valuation. The most recent private funding round valued Airbnb at $18 billion, almost half of its 2017 valuation at $31 billion. “Their revenue topped $1 billion in Q2 2019,” says Barrett Cohn, CEO and co-founder of Scenic Advisement. But not everything is rainbows and unicorns. “Like Uber and other gig-style services, Airbnb’s biggest challenge is in managing an end product that is largely out of their control.”
Palantir (PLTR) IPO
Data-mining firm Palantir recently filed for a direct listing, with the company slotted to go public on Sept. 23. Although technically distinct from an IPO because only existing shares will be sold, the listing still allows investors to buy into the secretive Peter Thiel-funded business. Recent private valuations have varied wildly, ranging from roughly $8 billion to about $20 billion on the high end. Like Airbnb, Palantir has seen its private valuation slashed; in 2015, it raised money at a $20.3 billion valuation. The company, which derives most of its revenue from the government, has never yet been profitable, although losses are trending downward. It plans to list under the ticker “PLTR.”
Robinhood IPO
Robinhood, the free stock trading app, changed an entire industry by becoming the first widely used broker to promote zero-fee trades. E-Trade (ETFC), Fidelity and Charles Schwab (SCHW) all belatedly slashed stock trading fees to zero in 2019, and Schwab even put together a $26 billion all-stock buyout of TD Ameritrade (AMTD) – creating a firm of 24 million clients – largely to combat Robinhood. A central force in the rise of the retail investor, Robinhood makes money by selling its order flow to market makers and high-speed trading firms, interest earned on cash balances as well as its own debit card and several other sources. Robinhood’s valuation has been soaring in 2020, raising money at an $8.6 billion capitalization in July and $11.2 billion in August.
Doordash IPO
Another topical startup on the list of top 2020 IPOs is DoorDash, the food delivery app. It’s reportedly planning an IPO in the fourth quarter after filing confidentially to go public back in February. Considering the stiff competition, though, the economics could prove difficult in the early going, even amid the pandemic. If a 2020 IPO comes to fruition, investors will soon see the financial health of the company for themselves. With investors like SoftBank (SFTBY) and Sequoia, DoorDash has raised billions in the private markets, most recently garnering a $16 billion valuation in June, up from $13 billion in November 2019.
Asana (ASAN) IPO
Asana makes team collaboration software for the workplace, and while industry economics may be a bit more favorable than food delivery, this area has its fair share of competitors, too. Slack (WORK) and Atlassian (TEAM) are two notable rivals in the highly relevant enterprise collaboration space, with market values of around $14 billion and $41 billion, respectively, proving a large addressable market. Asana is expected to begin publicly trading via a direct listing on Sept. 30, under the ticker “ASAN.” Its co-founder and CEO, Dustin Moskovitz, would likely have faith from Wall Street, having co-founded a little company called Facebook (FB) many moons ago.
Wish IPO
Being an e-commerce company in the age of Amazon.com (AMZN) takes some intestinal fortitude, and Wish is proving its willingness to go up against a trillion-dollar company. The company has now raised $1.6 billion since its debut in 2010. Its most recent round raised $300 million in August 2019, bringing Wish to an $11.2 billion valuation. Wish, which has focused on a niche within e-commerce (a focus on largely unbranded, inexpensive items) seeks to connect buyers directly to manufacturers, which often operate in China. Wish filed confidentially for an IPO to finance further expansion, so expect to see its financials in short order.
Bumble IPO
Last but not least among the hottest potential upcoming IPOs in 2020 is Bumble. The online dating app second only to Tinder in popularity, Bumble may have as many as 100 million users. There’s certainly room for investable diversity in this niche, as currently Match Group (MTCH) – the parent of Tinder, Match, Hinge, Plenty of Fish (POF.com) and others – is the only game in town. That hasn’t been such a bad game; shares have advanced from less than $20 a share in 2017 to more than $100 in 2020. Bumble may wait until 2021 to hit markets, so it will be interesting to see the books before then. Rival Match has reached a market cap of around $28 billion.
