In this article we are going to list the 15 biggest IPOs of 2020. Click to skip ahead and jump to the 5 Biggest IPOs of 2020.
Last year was undoubtedly a year full of uncertainties as we all tried to adjust to the new normal. With the World Health Organization declaring COVID-19 as a pandemic, many of our activities came to halt. This pandemic has affected everyone in the world in an unprecedented manner, directly or indirectly. Not only did COVID-19 have a serious implication on people’s health but it adversely affected the economy and businesses all over the world.
In this health and ultimately economic crisis many businesses stopped their operations and laid off people as they tried to navigate this unprecedented challenge. Although all the businesses were impacted by COVID-19, the traveling industry took the worse hit as global travel came to halt abruptly. Moreover, the hospitality sector suffered from the decline in tourism.
Having said that, this year redefined the role of leadership as many business leaders decided to bounce back and take this pandemic as an opportunity to become better and stronger. For instance, despite all the turbulence, many companies were brave enough to hold their ground and make the most of the available opportunities. For example, the list of 15 biggest public companies in the world heading into 2021 showcases that despite facing lockdown, 2020 was a successful year for many companies.
Many companies also went public in 2020 and were highly successful, and able to raise billions of dollars. It was observed that unexpectedly the amount raised in 2020 was higher than in 2019. This is because in 2019 there were only 110 public offerings, whereas in 2020 there were 129 initial public offerings. One particular reason behind this is the fact that as the stock market started to perform better, more and more investors gained confidence.
Among all the companies, Doordash (DASH), Snowflake (SNOW), and Airbnb (ABNB) had the biggest IPOs (Initial public offerings) of 2020. Even though both DoorDash and Airbnb faced difficulties due to the worldwide lockdowns, they were able to raise over $3 billion. The fact that people are not able to step out of their homes was used as an opportunity by DoorDash to bloom its business. On the first day, the stocks of DoorDash surged 85 percent. DoorDash raised $3.4 Billion.
Juxtaposed to this, Airbnb became the largest tech IPO of 2020 as on the first day it stocked more than double. This was impressive as due to the collapsing of revenues, this company laid off 1,900 employees and took a loan of $2 billion. Later, Airbnb’s valuation surged past $100 billion. Both Doordash and Airbnb used a hybrid auction model. This allowed the executives to solicit bids from investors before determining the price. As a result, there was no need for any discount as they were able to sell the shares based on the actual demand.
Moreover, Snowflake became the largest software IPO of 2020. On its first day, the stocks of Snowflake took a jump of 104 percent. The initial price of the stock was $120 but as demand grew, the price soon nearly doubled for the coveted stock.
One thing that needs to be highlighted is that the biggest IPO would have had been of Ant Group if it was not blocked by the government at the last minute. Ant Group was expected to raise around $37 billion. It was founded by the billionaire Jack Ma and the company aimed at offering the shares per $10.32 each. But at the last moment, the Chinese government ordered Ant Group to revamp their business. This indefinite suspension was two days before the scheduled offering and this led to a great business loss. For example, after this news, the shares of Alibaba, Ant’s parent company, tumbled more than 9%.
While this was a good year for many companies in terms of their IPOs, not every investor needs to jump on the bandwagon and do IPO investment. This is because in this volatile market due to the pandemic, it is better to be cautious. Having said that, the IPO market bounced back to a level that has not been observed since the dot-com boom, and therefore we are here to shed light on the biggest IPOs. So without further ado, let’s take a look at the companies which actually emerged quite successful in 2020, starting with number 15:
15. Lemonade (NYSE:LMND)
Lemonade is an American insurance company that provides pet health, homeowners, and renters policies. It allows you to access insurance policies via desktop and mobile apps through chatbots. When it comes to its business model, Lemonade provides underwriting profits to nonprofits of the customer’ choice. Lemonade is backed by investors such as Aleph, XL, Seal Grusd, Thrive Capital, General Catalyst and Sequoia Capital, etc. In 2020, Lemonade gained more than 1 million active customers. Its IPO was $29/share and the market cap was $8,544 million. the amount it raised through the IPO was $319 million.