In this article, we discuss the 10 most successful tech IPOs of 2021.
2021 saw a flurry of IPOs despite an uncertainty around the stock market in general due to virus and inflation fears. According to research by consulting firm EY, there were more than 2,300 public offerings globally in 2021, an increase of 64% compared to 2020. These offerings raised a record $453 billion, up 67% against the proceeds from the previous year. The European, Middle East, and African regions were responsible for a significant portion of this growth, along with India and the United States.
Overall, the tech sector dominated the headlines with regards to new listings. More than 600 tech-related IPOs raised $147 billion in proceeds over 2021, more than double the amount raised by the health sector with $65 billion in net proceeds. Analysts expect IPO activity to continue in 2022 despite geopolitical tensions and the rise of a new variant of COVID-19. However, with market volatility expected to increase, companies have been advised to keep plans in place to meet financing needs in case public offerings are delayed.
The market uncertainty will likely also affect some of the best-performing stocks of the year 2021 that include Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), Shopify Inc. (NYSE:SHOP), Twitter, Inc. (NYSE:TWTR), and Sea Limited (NYSE:SE), among others. These firms have been investing heavily in seed rounds of promising startups. Paul Go, an EY Global IPO Leader, believes that “resilient growth strategies and well-articulated ESG plans” are important for these IPO-bound startups as investors prepare for 2022.
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Our Methodology
All the companies listed below debuted on the stock market in 2021. The stocks that operate in the high growth sector of technology and registered gains of more than 10% in 2021 were preferred for the list. The upcoming growth catalysts, business fundamentals, and analyst ratings of the companies are also discussed to provide readers with additional context for their investment decisions.
Most Successful Tech IPOs of 2021
10. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 35
Gain in 2021: 18%
SentinelOne, Inc. (NYSE:S) operates as a cybersecurity provider. It has differentiated itself from other cybersecurity firms by commercializing the first artificial intelligence powered XDR platform, a cybersecurity product that SentinelOne, Inc. (NYSE:S) describes as “truly autonomous”. The revenue is growing, registering a 128% year-on-year increase in the third quarter, and the fundamentals look strong, promising growth for investors in the long-term.
Deutsche Bank analyst Patrick Colville has a Buy rating on SentinelOne, Inc. (NYSE:S) stock with a price target of $63. In a recent investor note, the analyst highlighted that SentinelOne, Inc. (NYSE:S) was “capturing investment in the buoyant endpoint market”.
At the end of the third quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in SentinelOne, Inc. (NYSE:S).
Just like Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), Shopify Inc. (NYSE:SHOP), Twitter, Inc. (NYSE:TWTR), and Sea Limited (NYSE:SE), SentinelOne, Inc. (NYSE:S) is one of the stocks attracting the attention of growth investors.
9. GLOBALFOUNDRIES Inc. (NASDAQ:GFS)
Number of Hedge Fund Holders: N/A
Gain in 2021: 40%
GLOBALFOUNDRIES Inc. (NASDAQ:GFS) makes and sells semiconductors. The stock stands to benefit from the increase in demand for chips as cars, smartphones, and other electronic devices become central to the everyday life of people across the world. With rapidly advancing tech that needs ever powerful chips, the US is also ramping up investments in home-based chipmakers to tackle Chinese dominance in this regard. GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is one of the leading candidates for this government spending.
On November 18, GLOBALFOUNDRIES Inc. (NASDAQ:GFS) announced a partnership with automaker Ford aimed at advancing semiconductor development in the US. As part of the deal, GLOBALFOUNDRIES Inc. (NASDAQ:GFS) will make chips for Ford vehicles while also conducting research for new chips.
The new chips, according to GLOBALFOUNDRIES Inc. (NASDAQ:GFS), will have advanced solutions built-in specifically for the automotive industry. These include autonomous driving, battery management, and in-vehicle networking.
8. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 24
Gain in 2021: 44%
AppLovin Corporation (NASDAQ:APP) is an application software firm. Morgan Stanley analyst Matt Cost recently upgraded the stock to Overweight from Equal Weight and raised the price target to $120 from $87, noting that consumer time and money spent on mobile devices had increased five times in recent years, and AppLovin Corporation (NASDAQ:APP), as an emerging mobile advertising network, could benefit from the increased spending in this area in the coming years.
AppLovin Corporation (NASDAQ:APP) posted earnings for the third quarter on November 10, reporting a revenue of $726 million, up more than 90% compared to the revenue over the same period last year and beating estimates by $29 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Spruce House Investment Management is a leading shareholder in AppLovin Corporation (NASDAQ:APP) with 5 million shares worth more than $361 million.
7. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 50
Gain in 2021: 31%
Roblox Corporation (NYSE:RBLX) stock has quickly become a hedge fund favorite since it debuted on the market in March 2021. The valuation of Roblox Corporation (NYSE:RBLX) has been driven by the hype around the “metaverse”, especially in the context of the rebranding of Facebook. Investors expect Roblox Corporation (NYSE:RBLX) to be one of the leading players in the metaverse based on strong fundamentals that include growing revenue and free cash flow generation.
Needham analyst Bernie McTernan recently initiated coverage of Roblox Corporation (NYSE:RBLX) stock with a Buy rating and a price target of $136, noting that Roblox Corporation (NYSE:RBLX) was in the early days of penetrating the global gaming market and could grow annual bookings by as much as 20% in the coming years.
At the end of the third quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $3.5 billion in Roblox Corporation (NYSE:RBLX), up from 49 in the previous quarter worth $4.9 billion.
In its Q2 2021 investor letter, Guardian Fund, an asset management firm, highlighted a few stocks and Roblox Corporation (NYSE:RBLX) was one of them. Here is what the fund said:
“The wonder-tale stories of children’s books show us that there are infinite possibilities of stories and worlds. The metaverse, the idea that describes the shared 3D spaces in a virtual universe, is enabling people to create fiction. Over the past six months, we initiated a new investment in Roblox. The firm was founded in 1989 by David Baszucki and Erik Kassel when they programmed a physics lab where students could study how cars would crash.
Today, Roblox has become a leading platform with a mission to build a human co-experience that enables billions of users to play, learn, and build friendships in the metaverse. Recent advances in cloud computing, computing devices, and machine learning, enable the materialization of the metaverse. Take what we have in virtual reality today and fast-forward a few decades. Humans will be able to experience unimaginable things and in a couple of millennia virtual economies are likely to become bigger than the physical trade on planet Earth.
Over the first quarter of 2021, Roblox reported 140% revenue growth, 42.1 million daily active users, and 9.7 billion engaged hours. The opportunity for this platform is massive.”
6. Confluent, Inc. (NASDAQ:CFLT)
Number of Hedge Fund Holders: 27
Gain in 2021: 69%
Cowen analyst J Derrick Wood recently named Confluent, Inc. (NASDAQ:CFLT) as a “best” investment idea for 2022 keeping an Outperform rating and a $100 price target on the stock. The analyst expects Confluent, Inc. (NASDAQ:CFLT) to grow sales in the coming months and strengthen strategic positioning for data-in-motion. Confluent, Inc. (NASDAQ:CFLT) recently signed a data-in-motion partnership with the Alibaba Cloud.
Confluent, Inc. (NASDAQ:CFLT) posted earnings for the third quarter in early November, beating analyst estimates on earnings per share by $0.06. The revenue over the period was $102 million, up 66% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Coatue Management is a leading shareholder in Confluent, Inc. (NASDAQ:CFLT) with 7 million shares worth more than $14 million.
Alongside Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), Shopify Inc. (NYSE:SHOP), Twitter, Inc. (NYSE:TWTR), and Sea Limited (NYSE:SE), Confluent, Inc. (NASDAQ:CFLT) is one of the stocks on the radar of hedge funds.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Confluent, Inc. (NASDAQ:CFLT) was one of them. Here is what the fund said:
“The new issue market remains an attractive source of new ideas and we participated in four IPOs in the latest period. Confluent sells and distributes a commercialized version of open source software called Kafka created by former executives at LinkedIn. The solution allows enterprise users the ability to capture data in real time as it is streaming. A prime use case is capturing real-time inventory across retail stores and distribution centers to enable omni-channel commerce. We believe it is early days in the company’s commercialization of this technology which can capture data in both on-premise and hybrid cloud environments. Global-e Online, meanwhile, removes many of the frictions around cross-border ecommerce by handling the different tax structures, languages, currencies, local logistics and fulfillment/returns for any size retailer. The company’s initial customers have been mostly mid to higher end retailers but an investment by Shopify should enable Global-e to significantly increase merchant reach.”
5. Monday.com Ltd. (NASDAQ:MNDY)
Number of Hedge Fund Holders: 17
Gain in 2021: 71%
Monday.com Ltd. (NASDAQ:MNDY) is a systems software firm. It operates in the high growth cloud market and is undervalued compared to other tech stocks given that it recently beat market estimates on earnings and also has high levels of customer satisfaction. This is because the company offers businesses the chance to build customized software applications using the tools provided by Monday.com Ltd. (NASDAQ:MNDY). The total addressable market for Monday.com Ltd. (NASDAQ:MNDY) is 200 times present revenues.
Canaccord analyst David Hynes recently reiterated a Buy rating on Monday.com Ltd. (NASDAQ:MNDY) stock and raised the price target to $430 from $350, noting the stock was one that “growth investors should continue to own” despite a pullback in share prices.
At the end of the third quarter of 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $495 million in Monday.com Ltd. (NASDAQ:MNDY), down from 19 in the preceding quarter worth $180 million.
4. DigitalOcean Holdings, Inc. (NYSE:DOCN)
Number of Hedge Fund Holders: 27
Gain in 2021: 88%
DigitalOcean Holdings, Inc. (NYSE:DOCN) owns and runs a cloud computing platform. On November 12, investment advisory William Blair initiated coverage of DigitalOcean Holdings, Inc. (NYSE:DOCN) stock with an Outperform rating and no price target. Analyst James Breen, in an investor note, underlined that the firm was marketing a differentiated platform for the underserved segment of the cloud sector and was operating in a large and growing market.
DigitalOcean Holdings, Inc. (NYSE:DOCN) posted earnings for the third quarter on November 4, reporting earnings per share of $0.12, beating estimates by $0.05. The revenue over the period was $111 million, up 37% year-on-year.
At the end of the third quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $758 million in DigitalOcean Holdings, Inc. (NYSE:DOCN), up from 16 in the preceding quarter worth $219 million.
3. HashiCorp, Inc. (NASDAQ:HCP)
Number of Hedge Fund Holders: N/A
Gain in 2021: 7%
HashiCorp, Inc. (NASDAQ:HCP) provides infrastructure automation solutions. Some of the most famous products of the firm include Terraform, an open source infrastructure as code software tool, Vault, a password management helper, and Nomad, a container-management tool. HashiCorp, Inc. (NASDAQ:HCP) aims to provide consistent workflows and secure solutions for public and private cloud environments.
HashiCorp, Inc. (NASDAQ:HCP) debuted on the market in December 2021 and fetched a valuation of around $14 billion. On the first day of trading, the share price of HashiCorp, Inc. (NASDAQ:HCP) jumped nearly 10% from the IPO price. However, the stock has pulled back in recent weeks amid a larger lull around growth stocks.
Citi analyst Fatima Boolani recently initiated coverage of HashiCorp, Inc. (NASDAQ:HCP) stock with a Neutral rating and a price target of $100.
2. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: N/A
Gain in 2021: 24%
Informatica Inc. (NYSE:INFA) owns and runs an artificial intelligence platform for management of data at enterprise level. Informatica Inc. (NYSE:INFA) raised more than $800 million at the IPO in late October 2021, fetching a valuation of nearly $8 billion. Informatica Inc. (NYSE:INFA) has continued to register impressive gains since then, climbing to a market capitalization of close to $10 billion within a few weeks of the initial offering.
Informatica Inc. (NYSE:INFA) posted earnings for the third quarter in late November, reporting earnings per share of $0.23, beating estimates by $0.06. The revenue over the period was $361 million, up 10% year-on-year.
On December 9, investment advisory Macquarie initiated coverage of Informatica Inc. (NYSE:INFA) stock with an Outperform rating and a price target of $40. Analyst Frederick Havemeyer issued the ratings update.
1. Samsara Inc. (NYSE:IOT)
Number of Hedge Fund Holders: N/A
Gain in 2021: 13%
Samsara Inc. (NYSE:IOT) operates as an application software firm. The firm markets products that increase the safety of global cloud-based operations. For example, some of the products that Samsara Inc. (NYSE:IOT) offers in this regard include video-based safety, vehicle telematics, apps and driver workflows, and equipment monitoring, among others. These products are powered by artificial intelligence.
Samsara Inc. (NYSE:IOT) products are used across a wide range of industries, including healthcare, transportation, and utilities. Samsara Inc. (NYSE:IOT) raised $805 million at the initial public offering in 2021, trading at the top of the IPO price range and fetching a valuation of around $12 billion.
Analysts expect Samsara Inc. (NYSE:IOT) stock to climb in the coming years as the firm operates in a niche market within the software industry and spending in the sector was accelerating amid the larger backdrop of digitization.
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Disclosure. None. 10 Most Successful Tech IPOs of 2021 is originally published on Insider Monkey.
