The Most Anticipated IPOs of 2022
Last week, we told you about the IPO of Justworks, the company that created the management accounting platform. Due to the current market situation, the underwriters decided to postpone the IPO to a more favourable period. The underwriters of other IPOs followed in their footsteps, that’s why today, we’ll talk about the most anticipated IPOs of 2022.
The company was established in 2015 with headquarters in San Francisco, California. Developers decided to create a messenger for gamers with a wide range of free services – text, voice, and video chats. Users can communicate while playing without risking disconnecting. It’s particularly important for cyber athletes, who were indeed instrumental in the growth of Discord popularity.
The messenger is compatible with all operating systems, including Windows, macOS, and Linux. In addition to that, it can be installed on a mobile device. Discord’s key competitive advantage is that it can be used even with gaming consoles, such as Xbox and PlayStation. The messenger audience is over 140 million people all over the world.
Microsoft took interest in buying Discord but the acquisition didn’t happen. Now Discord intends to go public at the end of 2022. The preliminary estimate was made during the latest round of financing and amounted to about $15 billion.
In the last few years, large corporations tend to use data analysis for making management decisions. It resulted in the growth of demand for software intended for this purpose. In 2013, seven scientists from the University of California, Berkeley, founded Databricks. Its speciality is the development of software for BigData analysis.
According to BusinessWire, the global BigData analysis market is expected to reach $142.5 billion by 2024. As a result, the average annual growth rate could be 20%.
Databricks already has over 5,000 clients. Among them are such famous companies as Comcast and T Mobile. In 2020, the company’s revenue demonstrated 75% growth, up to $350 million. The revenue in 2021 is expected to pass $500 million. the company’s goal for 2022 is $1 billion in sales. Databricks capitalization is estimated at $28 billion. The exact IPO date hasn’t been announced yet.
Databricks’s closest competitor is Snowflake, its IPO generated a 171% net profit to investors during the Lock-up period, that’s why they have high hopes for Databricks.
With the expansion of the Internet and smartphones, offline shopping starting giving up positions slowly in eCommerce. The coronavirus pandemic in 2020 gave an additional boost to online shopping. To sell goods online, merchants need to have software for the integration of banking services to accept payments.
Stripe has been developing solutions for accepting and processing electronic payments since 2011. The issuer’s clients are DoorDash, Meta Platforms (Facebook), Google, Peloton, Zoom, Amazon, Shopify, Instacart, and other tech giants. The company earns on commissions for transactions, 2.9%+$0.3. The global payment service market is expected to reach $42.9 billion by 2025 with an average annual growth rate of 16.4%.
All these factors make the stock really attractive for investors. In spring 2021, the company raised $600 million during the latest round of financing, which featured the leading venture company Sequoia Capital. Stripe’s capitalization is currently estimated at $100 billion and its IPO may be the most significant one in 2022.
Far back in 2005, a social network called Reddit was intended to be a news aggregator. At first, the platform had a lot of content posted from fake profiles, which lured the audience into discussions. Little by little, users started exchanging information on their own and the platform expanded. The current number of active users is over 52 million people worldwide and 54% of them are US residents.
The company earns on the premium subscription Reddit Gold and the advertising revenue. Reddit’s sales growth rate is about 300%. In the future, the growth rate won’t probably increase as quickly as before.
Reddit came into the spotlight owing to WallStreetBets, the community, whose members used to discuss investment ideas for buying stocks. The most famous story involved the shares of loss-making gaming retailer GameStop. Because of orchestrated efforts of retail investors from WallStreetBets, market professionals with short positions suffered losses worth hundreds of millions of dollars. Traders of the above-mentioned community are expected to participate in the IPO.
During the latest round of financing, the company raised $410 million, mostly from Fidelity Management. The social network is estimated at $15 billion.
When Bitcoin first emerged, it was quite difficult to imagine that in less than 10 years there would be a huge number of coins and millions of traders would trade them on crypto exchanges. These financial operations are performed on specific platforms. In some countries, these platforms are required to get a special licence from the local regulator.
Kraken was registered in the US in 2013. As of now, it has 5.77 million clients, a 77% increase compared with 2020. As for the volume of transactions, Kraken ranks 4th in the world, behind Huobi Global, Binance, and Coinbase. The latter is the platform that has already gone public – it had a direct listing (without additional issue).
The issuer’s revenue and profit directly depend on the volatility and popularity of cryptocurrencies. These factors are difficult to predict, and that’s a risk for potential investors. Looking at the financial performance of Coinbase, we may assume that the exchange’s revenue in 2021 may reach $200 million. The company’s potential capitalization is estimated at $70–100 billion. Both crypto optimists and crypto sceptics may profit off Kraken shares.
In 2020 and 2021, the IPO market delivered returns to investors mostly due to the soft monetary policies of the world’s leading Central Banks. This year, regulators of advanced economies are expected to raise benchmark rates, which means that buying stocks on the risky IPO market will require a very careful choice.
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