The number of IPOs in the first three months of 2021 rose a massive 677% from the same period the year before, when pandemic worries were gripping investors. And by some measurements, despite bumps in the road, the second quarter has been every bit as robust for IPOs, with the number of companies going public up 15% compared with the first quarter of 2021 making the IPO market the number one choice for investors today.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IPO stocks to watch in 2022

 

With the stock market trading at all-time highs through much of 2021, the IPO market has remained strong, carrying the momentum from the second half of 2020 when a strong rebound in tech stocks encouraged new offerings. Although investor sentiment may be shifting with interest rates expected to rise, there are still a number of hot IPOs entering the market for 2022, and others are anticipated.

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Stripe (Pre IPO stock available now)

The biggest elephant in the room when it comes to hot upcoming IPOs to watch in 2022 is San Francisco-based online payments giant Stripe, which enjoys plenty of funding from venture capitalists and institutional investors. The company was last valued at $95 billion in a $600 million funding round in May 2021. This allows Stripe, whose e-commerce software processes payments for massive tech players like Amazon.com and Alphabet Inc.'s (GOOG, GOOGL) Google, to bide its time and wait for perfect conditions and a mind-blowing valuation before offering shares to the general public. As with other hot tech startups, Stripe's growth massively accelerated during the pandemic as consumers flocked to online stores to shop. Between April 2020 and roughly a year later, Stripe's valuation surged from $36 billion to $95 billion in private funding rounds.

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Potential 2022 IPO valuation: More than $100 billion

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Discord

Named by U.S. News as one of the top upcoming IPOs to watch in 2022 back in December, the popular social messaging app hasn't yet confirmed a move to go public, but more and more signs are pointing to a move to tap public markets. In March, Bloomberg reported that Discord was interviewing investment bankers to prepare to go public, indicating that a formal announcement could be imminent. The company is reportedly considering a direct listing. Discord, which surged in popularity during the pandemic and enjoys a strong brand and cult-like user base, is a popular communication tool in the gaming and cryptocurrency communities. Confident in its ability to keep growing, Discord turned down a $12 billion buyout offer from Microsoft Corp. (ticker: MSFT) last year. In September, the company raised $500 million.

 

Potential 2022 IPO valuation: $15 billion 

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Databricks

It's rare for companies to achieve valuations of more than $30 billion without IPO chatter, and cloud-based data storage and analysis company Databricks is no exception. While the company hasn't yet announced public money-raising plans, it's easily one of the hottest investments in the world of venture capital. The high-tech firm, whose services use artificial intelligence to sort, cleanse and present Big Data for customers, raised $1.6 billion at a $38 billion valuation last year from investors that included Bank of New York Mellon Corp. (BK) and the University of California's investment fund. Unfazed by the market beatdown peer Snowflake Inc. (SNOW) has taken – the Warren Buffett holding is off about 50% in 2022 through mid-March – CEO Ali Ghodsi said earlier this year that the company's "growth rate will break through the multiple compression that's happening in the market" if and when Databricks goes public.

 

Potential 2022 IPO valuation of around $38 billion.

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Chime

Another fast-growing private company is financial technology, or fintech, leader Chime, a digital bank catering to average people looking to save a dollar. Unlike traditional banks, which make small fortunes on low-income and financially uneducated customers via monthly fees, overdraft charges and account minimums, Chime is going for the mass market by ditching such revenue streams. Chime's private valuation soared from $15 billion in 2020 to $25 billion in 2021. Entering 2022, the company was reported to be pursuing an IPO as early as the first quarter, but Chime is reportedly pushing back its 2022 IPO plans to the second half of the year as it doubles down on new product releases. Incidentally, fintech stocks have also gotten hammered in the first quarter, with stocks like SoFi Technologies Inc. (SOFI) and PayPal Holdings Inc. (PYPL) each off nearly 50% year to date.

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Potential 2022 IPO valuation: $35 billion to $45 billion

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If you have a particular IPO that you would like to take part in, contact Arcadia Group and we will share our views and opinions, and furnish you with all the relevant details allowing you to make an informed choice before you make any investment.

 

 

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