What a difference one year can make. The market for initial public offerings, or IPOs, in 2021 and 2022 is like night and day. In 2021, 1,073 companies went public in the United States, setting a new record. According to FactSet statistics, that number fell to 92 in the first six months of 2022. The S&P 500 recently entered a bear market, also highlighting the stock market’s extreme volatility. Furthermore, the Federal Reserve has initiated a series of quick interest rate hikes not seen since 1994; inflation is at its highest level since the early 1980s; and a recession appears increasingly inevitable. Nonetheless, a number of private companies have been planning to go public, and some may do so in the second half of the year. Here are nine of the most anticipated forthcoming initial public offerings to watch in 2022.
Back in December, U.S. News named the famous social messaging app as one of the top upcoming IPOs to watch in 2022. The popular social messaging app hasn’t yet confirmed a move to go public. However, signals in the first part of the year began pointing to a move to access public markets. Bloomberg reported in March that Discord was interviewing investment bankers in preparation for a public offering, with the software apparently exploring a direct listing. It gained traction during the epidemic and has a cult-like user following. Discord is a popular communication tool in the gaming and cryptocurrency sectors. Discord accordingly turned down a $12 billion purchase offer from Microsoft Corp. (ticker: MSFT) in 2021, confident in its capacity to continue growing. The company raised $500 million in September 2021 at a $15 billion valuation.
Reddit filed confidentially for an IPO in late 2021, indicating that it will be one of the major impending IPOs in 2022. In recent years, Reddit’s valuation has gone parabolic. Especially with private fundraising rounds valuing the company at $3 billion in 2020 and $10 billion in 2021. Reddit has hired Morgan Stanley (MS) and Goldman Sachs Group Inc. as lead underwriters for its first public offering in January. (With a public valuation of at least $15 billion in mind.) Early investor Fidelity Investments reportedly marked down the value of its interest in Reddit by more than a third in April, indicating that the tech slump may cause that valuation to come down a bit.
Potential 2022 IPO valuation: $10 billion to $15 billion
Instacart, like Discord, benefited from pandemic-era lockdowns and the accompanying work-from-home economy, which is still in place in 2022. However, after reportedly tripling revenue to $1.5 billion in 2020, the company is facing an expected slowdown in growth. It makes an attempt to return to activities in a more regular operating environment. One such endeavor for the grocery delivery service is its push into digital advertising; last year, Instacart postponed plans to go public in order to focus on increasing that line of business. It’s a natural, higher-margin business for the corporation, as it caters to customers who are already ready to buy.
While a July 2022 executive team shakeup could indicate that Instacart is getting its ducks in a row in preparation for an IPO, the company reduced its own valuation by nearly 40% in late March in response to market conditions, making an IPO at its highest valuation of $39 billion unlikely, at least in 2022.
Potential 2022 IPO valuation: $24 billion
It’s unusual for firms to reach valuations of more than $30 billion without generating IPO buzz, and Databricks, a cloud-based data storage and analysis company, is no exception. It’s certainly one of the hottest investments in the world of venture capital, with investors including Amazon.com Inc. (AMZN), Salesforce Inc. (CRM), and Alphabet Inc. (GOOG, GOOGL). The high-tech startup, whose services utilize artificial intelligence to filter, cleanse, and present Big Data for consumers, garnered $1.6 billion from investors including Bank of New York Mellon Corp. last year at a $38 billion value.
(BK) and the investment fund of the University of California. Unfazed by the market beating that peer Snowflake Inc. (SNOW) has taken – the Warren Buffett holding is down about 56% in 2022 through mid-July – CEO Ali Ghodsi stated earlier this year that if and when Databricks goes public, the company’s “growth rate will break through the multiple compression that’s happening in the market.”
Potential 2022 IPO valuation: $38 billion
Chime, a rapidly expanding financial technology, or fintech, firm, has a noble business strategy. It also provides digital banking services to low-income and underbanked individuals. Chime does this by eliminating regressive practices such as traditional overdraft fees and account minimums. Chime’s concept attempts to cast a wide net and appeal to the public, and it makes money by offering Visa Inc. (V) debit cards, earning a portion of interchange fees every time its card is used. No matter how noble its business, is vulnerable to market pressures, and the company, valued at $25 billion in 2021, was projected to go public in the first half of 2022 when the year began. Barron’s even stated that Chime had chosen Goldman Sachs to assist with the IPO underwriting.
However, according to persons familiar with the subject, Barron’s reported in late May that the IPO was no longer expected in 2022. Still, never say never: if stock market sentiment improves rapidly, Chime might be back in play this year.
Potential 2022 IPO valuation: $25 billion or more
Mobileye has previously gone public and has firm plans to return to the warm embrace of public markets. Or, more precisely, chipmaker Intel Corp. (INTC) intends to reintroduce Mobileye to the public market five years after purchasing the machine vision startup for $15.3 billion. Mobileye, a pioneer in self-driving car technology, sells its technologies to major manufacturers like as Ford Motor Co. (F) and Volkswagen. Intel had planned to incorporate Mobileye’s technology and patents into its own self-driving division, but the option to spin out Mobileye as a separate company and retain a majority stake in the business may be the best way for Intel, which is struggling to catch up to faster-growing rivals like Nvidia Corp. (NVDA), to capitalize on one of its most prized assets.
However, in July, it was reported that the Mobileye IPO had been postponed until the market stabilized, however a fourth-quarter 2022 debut has not been ruled out.
Potential 2022 IPO valuation: $50 billion
Impossible Foods, like a number of other hot IPOs to watch in 2022, has seen 2021’s excellent window of opportunity turn into a bloodbath for newly public firms as investor risk tolerance continues to decline. Beyond Meat Inc. (BYND), the second main competitor in plant-based meats, is the closest publicly traded analog to Impossible Foods, with a 54% drop from the start of the year to July 14. Impossible Foods goods are available at Burger King and Starbucks Corp. (SBUX).
While it may be prudent for Impossible Foods to postpone its IPO until the latter part of 2022, the CEO declared going public “inevitable” as recently as November, the same month the business received $500 million at a $7 billion valuation. While obtaining a comparable valuation in public markets may be tough in 2022. Private investors will undoubtedly be seeking to maximize its go-public market worth.
Potential 2022 IPO valuation: $7 billion
Only a few months ago, Vingroup, Vietnam’s largest conglomerate, was almost certain to seek an IPO for its electric vehicle business VinFast in the second half of 2022. The corporation has big goals, aiming for 42,000 vehicle sales in 2022, with annual sales expected to reach 750,000 by 2026. VinFast is to invest $4 billion in the building of an electric SUV manufacturing in North Carolina. It plans to employ 7,500 people. After earlier stating its goal to raise $3 billion at a valuation of $60 billion. The company’s latest statement is more cautious.
Vingroup Chairman Pham Nhat Vuong said in May that the company, while still aiming for a fourth-quarter IPO. It may postpone it until 2023 if market conditions were unfavorable.
Potential 2022 IPO valuation: $60 billion
Among the major IPOs to watch in 2022, San Francisco-based online payments company Stripe is unquestionably the most hotly awaited. Stripe’s e-commerce platform processes payments for major digital giants such as Amazon.com and Google, and it has received significant money from private venture capital and institutional investors, allowing it to weather any market volatility. Stripe, which is sometimes compared to PayPal Holdings Inc. (PYPL), raised $600 million in a May 2021 financing round that valued the firm at $95 billion. As of July 14, PayPal’s public market worth was around $80 billion.
While the rise of areas such as e-commerce aided Stripe’s growth during the pandemic, the company has recently reduced its internal valuation by 28% to $74 billion, according to a July report from The Wall Street Journal.
Potential 2022 IPO valuation: At least $74 billion