Although this past year was wildly positive for the broad markets, initial public offerings (IPOs) were one of the few segments that lagged. Uber, Lyft and some other big names fell flat and largely contributed to this underperformance, but a few small firms had spectacular gains. With 2020 now underway, a new batch of companies are planning to come public, hopefully with more success than last year.
Some of these companies already have formally filed their S-1 and equivalent forms with the U.S. Securities and Exchange Commission (SEC). Other companies have filed confidential data with the SEC for IPOs, and other so-called unicorn companies, those with private market valuations north of $1 billion, are all highly speculated to come public.
Stock market investors actually want to see more IPOs. There has been widespread criticism that many companies are waiting too long to come public. Some investors have bought into these companies on secondary private company exchanges as insiders, and prior backers have sold shares here and there.
24/7 Wall St. has compiled a list of companies likely be on the IPO docket for 2020. Note that some of these companies have been on that docket, or at least were believed to be, for a while now. Companies such as Airbnb, WeWork, Postmates and Robinhood are all on the list here.
There are also other companies, some of which are widely anticipated to come public, that may be unheard of or not very well known to the investing community. Note that this is a preliminary list, and some data may change in a moment’s notice that would take any of them off the IPO docket.
Here are nine highly anticipated IPOs to watch for in 2020.
Airbnb has competed against the hotel industry and other home rental services for years now, and some investors have called for it to have an IPO, long before 2020. The company was founded back in 2008. Still, inside turnover and lawsuits have created some uncertainty for a company that reportedly was valued at $31 billion after a $1 billion capital raise in 2017.
During the second quarter, the company said it had “substantially more than $1 billion” in revenue from more than 7 million listings on its service in more than 100,000 cities worldwide. It also has expanded with experiences and boutique hotels, and it has its “most wishlisted homes” that can be rented around the world.
Airbnb also debuted a new luxury service called Luxe in June with more than 2,000 high-end rentals. The service is expected to compete with Marriot’s luxury home-rental service, Homes & Villas.
Palantir Technologies is a top private data analytics and data mining outfit that caters to government clients. The company has been around for more than a decade and was founded by Peter Thiel back in 2003.
The company was valued at roughly $20 billion in a private fundraising round in 2015. Now in a recent fundraising round in September, the company was said to be targeting a valuation of at least $26 billion.
The company is known for being secretive, so who really knows what the valuation will be. We will have to just wait and see if 2020 is the year that the company is more open to the public.
Robinhood is an online brokerage service that primarily operates through its app. Although this company has only been making news in the past couple of years, it has been around since 2013. This online broker was one of the first to adopt a zero-fee trade policy for its customers, and only recently have the bigger online brokerage firms followed suit.
Over the summer, Robinhood received more financing for its business putting its valuation between $7 billion and $8 billion.
This startup has seen incredible growth over the past couple of years. In the summer of 2018, Robinhood had roughly 4 million users. This number was said to have jumped to 6 million by the end of the year. Currently, Robinhood has over 10 million users, according to Forbes.
While the company has not yet filed with the SEC to come public, Robinhood has been the talk of Wall Street for what the future could hold, especially in terms of getting more millennials into the market. One big question now is how it will differentiate itself in a world where all the top online trading platforms have also capitulated and gone into zero-commission trading.
Postmates has risen to popularity as the gig economy has taken off. If Uber and Lyft are glorified taxi services, Postmates is the delivery service equivalent — without the massive valuation. Postmates was launched in 2011 and offers an on-demand delivery service for restaurants and stores that previously did not offer deliveries. Postmates valuation is estimated to be roughly $2.4 billion as of September.
This company was expected to come public in 2019 when it confidentially filed for an IPO with the SEC in February. The S-1 was expected to come later in the year (many reports suggested September) but this never came about. CEO Bastian Lehmann has cited “choppy” market conditions, especially for growth-focused companies, as a rationale for not bringing the company public yet.
One concern for this company is the e-commerce Death Star, Amazon, which has taken the delivery service industry by storm. Big names like FedEx have felt the sting. Even though Postmates is fighting this battle on a more local level, it’s hard to believe that this firm won’t be affected in some way. On the other hand, Postmates is also experimenting with drone and robot delivery in Los Angeles, San Francisco and maybe soon New York.