New companies attempt to come to the market all the time and while some pay off for investors, others struggle to get off the ground.
So Money and Markets has done the digging for you and here we’ll discuss the Top 6 IPOs to watch in 2020.
According to IPOScoop.com, there were nearly 150 new companies that filed an initial public offering (IPO) in 2019
Whether you are a new investor or a seasoned veteran, it’s not only important to understand how to invest in an IPO, but what IPOs to look for.
Some we will look at have already filed paperwork with the Securities and Exchange Commission publicly, while others are speculated to go public at some point this year.
Here are the Top 6 IPOs to watch in 2020.
Top 6 IPOs to Watch in 2020:
1. Robinhood
This company operates an app and website dedicated to online stock trading, and it is huge among millenials.
The big news about Robinhood is that it was the first to offer free, no-fee trading — a policy other larger brokerages more recently have started to implement.
In a little more than a year, the platform has reached nearly 10 million users, up from 4 million in 2018.
In July, Robinhood announced it raised $323 million in funding, setting a valuation for the company of around $7.6 billion.
While leadership has said the long-term strategy is to take the company public, there is no timeline established for it to do so.
Because it has such a big customer base, Robinhood is one of our Top 6 IPOs to watch in 2020.
2. Palantir Technologies Inc.
Headquartered in Palo Alto, California, and founded by Peter Thiel in 2003, Palantir Technologies Inc. works primarily with government agencies using big data.
In December 2019, the company beat out Microsoft Corp. (Nasdaq: MSFT) and others for a $111 million contract with the U.S. Army. The company will supply software giving the Army one dashboard, combining human resources, supply chains and other operational functions.
In 2015, during its last funding push, the company reached a valuation of $20 billion, but it is targeting $26 billion with a new round of funding started in 2019.
Initially, the company set a date of 2020 to go public. But with the recent push to raise private funds, that could be pushed back to 2022 or 2023 at the earliest.
With a high-profile clientele and a strong valuation, Palantir Technologies Inc. is one of our Top 6 IPOs to watch in 2020.
3. Postmates
Operating in more than 2,900 American cities Postmates rivals fellow delivery services in market penetration.
The big difference is Postmates’ on-demand delivery and pickup platform caters to more than just breakfast, lunch and dinner. It delivers food, groceries and other retail goods using a mobile app and GPS.
In September 2019, Postmates reported raising $225 million, led by GPI Capital at a valuation of nearly $2.4 billion. At the time, it was reported the company raised nearly $900 million.
Postmates was scheduled to go public in late 2019,. However, market conditions turned against tech companies, causing a delay. There is no timeline for its IPO launch.
But because of its large platform of delivering a wide range of goods, Postmates is one of our Top 6 IPOs to watch in 2020.
4. Casper Sleep Inc.
One company that has already filed its IPO for 2020 is Casper Sleep Inc.
The direct-to-consumer mattress company filed with the Securities and Exchange Commission on Jan. 10, 2020.
In March 2019, the company said it had secured a $100 million Series D investment from several of its existing investors. That pushed the valuation of the company to around $1.1 billion. It brought the total amount raised to $340 million.
Its revenue for a nine-month period ending September 2019 was $312.3 million — a 20.3% year-over-year growth from the same time the previous year.
According to its filing, Casper has 60 retail stores across the U.S. in addition to its online business.
Because of its strong market establishment, Casper Sleep Inc. is one of our top six IPOs to watch in 2020.
5. Ant Financial
In hopes of capturing the strength of its parent company Alibaba Group Holding Ltd. (NYSE: BABA) and its IPO, Ant Financial is looking for launch in 2020.
In fact, Chinese regulators approved a restructuring of Ant Financial by Alibaba to pave the way. The plan included Alibaba exchanging 37.5% of Ant Financial’s pre-tax profit for a 33% equity stake.
The company owns Yu’e Bao, the world’s largest money market fund and credit rating system Sesame Credit.
In May 2019, it raised $10 billion from both global and local investors at a valuation of $150 billion — making it the largest IPO ever, when it’s launched.
Ant Financial operates Alipay which handles financial transactions on Alibaba’s Taobao and Tmall e-commerce platforms. Alipay can also be used for digital payment at stores and restaurants. It boasts more than 1.2 billion users.
While there is no timetable for its IPO, the fact that it caters to such a large market in China and has the potential to expand, Ant Financial is one of our Top 6 IPOs to watch in 2020.
6. Airbnb
The home-sharing rental service Airbnb recently said it plans to publish annual reports for stakeholders — a move leading up to an IPO.
According to Crunchbase, the company has raised nearly $4.4 billion over 15 funding rounds, giving it a valuation of around $35 billion. In a sense, that means the company really doesn’t need the money most companies go after in an IPO.
Despite that, Airbnb is expected to go public sometime later this year using a direct public offering — where current shareholders can trade shares, but no new shares are issued.
In November 2019, the company signed a deal with the International Olympic Committee reportedly worth $500 million to provide “guaranteed” accommodations for the next five Olympic games — Tokyo 2020, Beijing 2022, Paris 2024, Milan 2026 and Los Angeles 2028.
Because it already has substantial funding, and its growing business model, Airbnb is one of our Top 6 IPOs to watch in 2020.
2020: A Strong Year For IPOs?
In 2018, there were 192 companies that went public, according to Renaissance Capital — the most since 2014 — when Alibaba Group Holding Ltd launched the world’s largest IPO ($21.7 billion). There were 159 IPOs in 2019.
The value of IPOs has started to increase since a high in 2014, and IPO values have been around $46 billion in the last two years.
However, the number of companies that are profitable after their IPO reached a record low 28% in 2018.
But it’s hard to say what 2020 will bring for IPOs.
Regardless, it’s still important to know what companies could be going public. That’s why we have our list of the Top 6 IPOs to watch in 2020.
