In this article, we discuss 10 most anticipated IPOs of 2022. If you want to see more companies in this selection, click 5 Most Anticipated IPOs of 2022.
2021 was widely dubbed as the year of IPOs, since initial public offerings in the year fetched approximately $594 billion, a record high. SPACs, along with technology and healthcare firms, were the most common IPOs of 2021, driven by low interest rates and the vaccine rollout which fueled economic activity.
More than 3000 companies went public in 2021, and these newly floated businesses had a collective valuation of $2.7 trillion. The IPO frenzy was not limited to huge markets and companies from all over the world took the initiative to become publicly traded in 2021. The US IPOs exceeded records in terms of issuance volume and monetary proceeds, as 951 companies went public in 2021, raising $282 billion.
IPOs Heading Into 2022
The stock market in 2022 has a volatile macro backdrop that consists of not only raging inflation, but the Russia-Ukraine war, energy crisis, global supply chain challenges, a possible stock market bubble, and shortage of commodities. This has dampened the likelihood of IPO activity, specially when compared to last year. “I certainly don’t expect it to be as active as last year”, said Jay Ritter, a finance professor at the University of Florida with a research expertise in IPOs. Ritter also attributed the broad sell-off in growth stocks and the shift to value plays to the lower IPO activity in 2022.
Jay Ritter observed that the majority of the companies who go public via SPACs end up underperforming the IPO Index. Historically, 10% of the blank check firms do not find target companies and liquidate to return the funding to shareholders.
On January 26, Phillip Braun, a finance professor at Northwestern University’s Kellogg School of Management, stated:
“I think the SPACs are going to slowly die, and I think the IPO market will pick up in a year or year and a half”.
As we observe the upcoming IPOs of 2022, some of the most notable 2021 IPOs that met expectations of investors deserve to be highlighted. These companies were Roblox Corporation (NYSE:RBLX), Rivian Automotive, Inc. (NASDAQ:RIVN), and Robinhood Markets, Inc. (NASDAQ:HOOD).
Our Methodology
We have selected the most popular companies that are widely speculated to be listed publicly in 2022. We have also mentioned the potential valuation for each company for the convenience of investors. The companies are ranked according to their expected valuation.
Most Anticipated IPOs of 2022
10. Zazzle
Potential Valuation: $1 billion to $2 billion
Zazzle is an American digital marketplace where creatives and designers can list for sale uniquely manufactured products like apparel, fashion accessories, and decor. The online retailer was formed in 2005 by Robert Beaver, Bobby Beaver, and Jeff Beaver, receiving millions in funding the same year by American investors John Doerr and Ram Shriram, who also financed the early funding rounds of Google.
Zazzle is preparing for an initial public offering in the summer of 2022, and the company has hired Citigroup Inc and Barclays Plc for the process. Although little is known about the company’s financial position as of now, the marketplace offers over 300 million uniquely designed products that have been sold to more than 30 million customers. The IPO valuation could be anywhere between $1 billion to $2 billion.
Like Roblox Corporation (NYSE:RBLX), Rivian Automotive, Inc. (NASDAQ:RIVN), and Robinhood Markets, Inc. (NASDAQ:HOOD), Zazzle is expected to make waves in the stock market upon its listing.
9. Airtable
Potential Valuation: $11 billion
Airtable is a technology firm that offers cloud-based collaborative software which is akin to a spreadsheet, with features of a database. The software allows users who are not professional in coding languages to simplify the digital experience for their clients. Airtable’s initial public offering has been speculated for late 2022.
Howie Liu, Andrew Ofstad, and Emmett Nicholas founded Airtable in 2012, and the company is headquartered in San Francisco, California. Airtable’s clientele of 300,000+ companies includes several Fortune 500 constituents, including Netflix, Inc. (NASDAQ:NFLX) and Shopify Inc. (NYSE:SHOP).
On December 13, 2021, Airtable raised $735 million in a Series F funding round which raised the company’s valuation to $11 billion. The valuation doubled as compared to the beginning of 2021. This funding round included renowned investment firms such as Salesforce Ventures, Benchmark, Coatue Management, D1 Capital Partners, and Thrive Capital.
8. Reddit
Potential Valuation: $15 billion
Reddit is a California-based company running a social platform where users can discuss social issues, share advice, and narrate experiences. Individuals discuss news, politics, religion, video games, finance, books, fitness, and other interests in Reddit communities or “subreddits”. Communities are monitored for malicious activity by Reddit moderators, who are not employees of the company.
Reddit was founded in June 2005 by Steve Huffman, Aaron Swartz, and Alexis Ohanian, and it is one of the websites with the most traffic, often called the “people’s forum”. The true potential of Reddit’s reach and influence was realized in 2021 when Redditors on the WallStreetBets subreddit banded together to buy GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings, Inc. (NYSE:AMC), inflicting heavy losses on hedge funds that were shorting the stocks.
Reddit has filed preliminary IPO registration statements with the SEC and has hired Morgan Stanley and Goldman Sachs to guide the company through the process. Reddit is one of the most anticipated IPOs of 2022, with a valuation of $15 billion.
7. Discord
Potential Valuation: $15 billion
Discord was founded in 2015, and the company offers a digital platform which allows instant communication using VoIP, private messaging, and voice and video calls. Discord servers are channels where people can communicate, exchange information, and play. Discord is supported by Windows, iOS, Android, Xbox, and PlayStation, with 150 million active monthly users as of 2021.
Discord is among the most anticipated IPOs of 2022. The use of the platform soared in the pandemic-driven lockdowns, when people turned to Discord to stay connected for classes, gaming, and virtual events and conventions.
In 2021, Microsoft Corporation (NASDAQ:MSFT) offered a $10 billion acquisition deal to Discord, which was turned down by the company. Twitter, Inc. (NYSE:TWTR) and Amazon.com, Inc. (NASDAQ:AMZN) were also contenders for the acquisition of Discord, but the bids were turned down in favor of an initial public offering.
Discord’s latest funding round raised $500 million in September 2021, which doubled the company’s valuation to $15 billion as compared to the earlier year.
Although the company has not yet filed for an IPO with the Securities and Exchange Commission, Discord is expected to go public by mid-2022. This is speculated by market experts given Discord is expanding its board of directors, in addition to recently hiring a chief financial officer.
6. Databricks
Potential Valuation: $38 billion
Databricks is an American software company that operates as a data warehouse, leveraging artificial intelligence to scale data engineering, data science, and business analytics. Some of Databricks’ notable clients are ABN AMRO Bank, Condé Nast, H&M Group, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), and Shell plc (NYSE:SHEL). The company’s solutions are adopted by more than 7000 organizations globally, and more than 40% of the Fortune 500 companies have reported using Databricks’ services.
In 2021, the pandemic shifted operations online, and Databricks experienced massive growth. The company disclosed revenue for the year of more than $600 million. In a Series H funding round at the end of August 2021, Databricks gathered $1.6 billion. This increased its valuation from $28 billion to $38 billion.
Databricks does not disclose its profitability status, but the company is supported by major cloud giants — Amazon.com, Inc. (NASDAQ:AMZN), salesforce.com, inc. (NYSE:CRM), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), and Alibaba Group Holding Limited (NYSE:BABA).
The company has not listed with the SEC for an initial public offering yet, but Ali Ghodsi, co-founder and CEO of Databricks, hinted at a February 2022 IPO last year. This has not taken place yet, but the IPO is rumored to happen in 2022. The latest funding round “does not push out the IPO”, according to the CEO, who hinted at a direct listing but did not demerit the benefits of an initial public offering.
Just like Roblox Corporation (NYSE:RBLX), Rivian Automotive, Inc. (NASDAQ:RIVN), and Robinhood Markets, Inc. (NASDAQ:HOOD), Databricks will be a major tech IPO in recent history.
Click to continue reading and see 5 Most Anticipated IPOs of 2022.
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Disclosure: None. 10 Most Anticipated IPOs of 2022 is originally published on Insider Monkey.
