Investing

The Top IPOs to Watch in 2020

Chris Lange

Casper

Casper might not be a household name but it could prove to be a dark horse IPO in 2020. Companies that sell mattresses may not be exciting, but Casper is one of the first to break into e-commerce, easily differentiating itself from the field in a market that could double within the next five years.

This company has also taken the offensive on social media, enlisting celebrities as hired guns to push their mattresses. Influencers like Kylie Jenner, 50 Cent and even Leonardo DiCaprio are on the payroll, and it seems to be paying off.

Earlier this year, the company had its financials leaked online. According to the leak, Casper projected revenue for 2018 of $373 million with more than $100 million in the third quarter alone, a 49% year over year increase.

After a round of funding in March, analysts are estimating Casper’s valuation at just over $1 billion.

Ant Financial

Executives at Ant Financial have said that there are no immediate plans to go public and no timetable, but there is still much speculation. Ant Financial operates the massive Alipay service that handles financial transactions on Alibaba’s Taobao and Tmall e-commerce platforms. Also, it can be used as a digital payment option in stores and restaurants. Other Ant Financial products include a private credit platform, as well as consumer and small and medium-sized enterprise lending businesses.

Working as part of the Alibaba machine would already net it a huge valuation, but some think that it could be as high as $150 billion.

Probably the biggest draw of this company is its mobile payments platform that operates within China. Right now it seems unrealistic that any U.S. company could break into mobile payments in China, but this company would offer a vehicle for that type of investment, which makes it so enticing to U.S. investors.

Didi Chuxing

Didi Chuxing is another Chinese company to watch out for in 2020. Didi operates as a ride-hailing service, and many are calling it the “Uber of China.” In fact, Didi acquired Uber’s China business in 2016 for $35 billion. The company was originally founded in 2012.

The company had planned to come public in 2019, with a valuation around $80 billion, taking a backseat to Uber’s $120 billion valuation. However, Chinese Uber did not pull the trigger. Didi waiting to come public could weigh on the valuation, as Uber and Lyft valuations have suffered since they came public, causing investors to rethink if ride-hailing firms are overvalued in general.

Didi is not without competition for China. The two key players that it is up against are Auto Navi (owned by Alibaba) and local player Meituan Dianping. Both players are offering deep discounts in order to gain market share, and their local expertise could potentially impact Didi’s market share in the country.

Snowflake

Snowflake operates as a data warehousing cloud service provider, founded in 2012. The company has enjoyed continued growth over the last year. Revenues were up 237%, employee count doubled to 1,400 and Snowflake quadrupled the number of new customers bringing its total to about 2,400.

The company also won the business of credit card giant Capital One. Despite major players like Amazon and Microsoft in the field, Capital One chose Snowflake, and so far the partnership appears to be working out. Snowflake has attracted some other big names as well, and CEO Frank Slootman says the company is taking more business from the major players in the cloud.

The most recent valuation for Snowflake comes from October 2018 when the company raised $450 million, valuing the company at $3.95 billion.

WeWork

WeWork, which was one of the most anticipated IPOs of 2019, formally filed a request to withdraw its registration statement on the S-1 form that was initially filed with SEC. In simpler terms, WeWork no longer plans at coming public, at least for now. There is still some speculation that the company may come public later in 2020 or make more plans known, but this may just be wishful thinking.

Bad press has plagued this company, as analysts slashed its valuation over the course of this year. There’s even speculation that WeWork could run out of money. This company rents out co-working spaces to startups, freelancers and enterprises in some of the most expensive markets and seeks to make money back over time as companies and individuals pay their rent or membership.

WeWork was founded early 2010, and over the past nine years it has rapidly scaled its business. In recent filings with the SEC, the company boasted 528 locations in 111 cities across 29 countries. The 527,000 memberships represent global enterprises across multiple industries, including 38% of the Global Fortune 500.

Near the onset of IPO talks for this company, a brokerage house valued WeWork at roughly $100 billion. By the time the IPO was shelved, some estimates valued the firm at $10 billion. Some analysts are even calling this a classic example of the “greater fool theory.” As far as why this remains on an IPO list: the public markets may be the last bastion of financing ahead, meaning it may be the company’s only choice, regardless of its underlying troubles.