The IPO market was not great in 2022, no doubt about that.
Compared to 2021, this year has witnessed the lowest IPO proceeds in over 30 years. It accumulated only $7.7 billion after a whopping $142.4 billion the previous year.
Many companies decided to give up on 2022 for their venture into public debuts. The high inflation, drop in equity markets, increasing interest rates, and geopolitical uncertainty really killed the mood.
However, many businesses are holding their breath for 2023.
General optimism is floating around the IPO market, expecting it to show signs of life thanks to some of the most anticipated upcoming IPOs hitting the scene.
Today, I'm discussing the top 5 IPOs that we all want to see in 2023. So, if you plan to invest in some shares, be on the lookout for the following list.
Unless you've been living under a rock, you've used Reddit or at least heard about it. This online forum site features over 130,000 forums covering every topic imaginable and a massive community. It gets visitors in the billions each month.
As one of the most popular social media platforms out there and the self-proclaimed "front page of the internet", it's not hard to figure out why this IPO is on the top of 2023's most anticipated IPOs list.
It's not like Reddit isn't looking forward to the IPO. The company took a step to act on its intention to go public back in late 2021 when it filed its application to hold an IPO.
While Reddit didn't set a date and kept everyone waiting throughout the entire 2022, no one can blame them. This year just wasn't easy on the IPO market.
Additionally, the drop in the number of users and activity across other social media giants, such as Meta, may have something to do with Reddit treading the scene carefully.
After all, this company relies heavily on digital advertising and is always rooting for a rebound.
In 2021, it generated ad revenue of $350 million for a 150 per cent growth compared to the previous year. However, the projected value was $421 million.
The resulting pullback in spending is another reason why the company postponed its IPO listing.
Reddit has had a total of 11 funding rounds since its launch in 2005, raising a total of $1.3 billion. The most recent one was on the 12th of August 2021, when Fidelity invested $410 million.
Currently, the valuation of Reddit is $10 billion. This offering is keeping a lot of investors on the edge of their seats, and with Twitter's unstable situation, things are looking even better for Reddit.
TripActions is a travel and expense management platform that aims to modernize business travel.
It operates on the web or through an app, adopting the latest artificial intelligence and machine learning technologies to provide a hassle-free user experience and cut back on costs.
TripActions had a solid run since its founding in 2015. The pandemic did take a heavy toll on its business, but the company managed to bring in funding to stay afloat.
The continuous efforts of the company's executives and employees earned it a winning comeback. Innovative initiatives such as the global rapid reimbursement program kept business on track.
TripActions has also been working on its acquisition game.
The company now owns three organizations: Resia, Comtravo, and Reed & Mackay. These are travel management firms and service providers for business events.
Customers of TripActions include big players in the industry, such as Netflix, Lyft, Unilever, Shopify, Canva, Patreon, Loom, Carta, Databricks, and Heineken.
Currently, the valuation of TripActions is $12 billion. This is a significant up from its last valuation of $7.25 billion.
The company generated a total of $2.2 billion over 16 funding rounds; the most recent one was a Dent Financing round in December 2022 that raised $400.
Backed by 25 investors, TripActions is funded by names such as Goldman Sachs Bank USA, Silicon Valley Bank, Andreessen Horowitz, Greenoaks, Coatue, Addition, Akkadian Ventures, and Elad Gil.
According to unnamed sources for Business Insider, TripActions has reportedly filed confidentially for a 2023 IPO with the U.S. Securities and Exchange Commission.
The word got out in September 2022, and the estimated timeline is somewhere during the second quarter of the year. Goldman Sachs is set to represent TripActions in the listing, so gear up for the announcement in the few upcoming months.
The gloomy economic outline of 2022 affected many businesses, but one of the few sides that did catch a break is Databricks.
A group of computer science students started this software company about ten years ago at the University of California, Berkeley.
The whole thing began when they developed an open-source platform for managing large loads of data. They called it Apache Spark.
This system was a great success, and it only got bigger as the demand for data and analytics grew even more so, with industry aspects like machine learning and artificial intelligence taking the front seat.
In 2013, the founders launched Databricks and successfully commercialized their software for corporations.
In 2021, the annual revenue of the company was $425 million. In 2022, it generated over $400 million and broke the $1 billion mark in total revenue.
Not only did Databricks pull this off in the dry of 2022, but it did so with 6,000 customers and a solid network of partners. The company works with names such as Comcast, Shell, CVS Health, Amazon, Microsoft, Salesforce, Alphabet, Regeneron Pharmaceuticals, Booz Allen Hamilton, and Capgemini.
It gets even better.
The business model of Databricks is subscription-based. This offers better market stability even in unpredictable conditions and effectively attracts investors worried about shaky cash flows.
Not to mention, the support of the four biggest cloud providers is a huge help.
The exact details of Databricks' IPO are still unclear. Many are ready to hop on it as soon as it drops, especially since its AI-driven software is set only for further improvement over time.
Currently, the valuation of Databricks is $38 billion. It generated $3.5 billion over nine funding rounds; the most recent one in August 2021 raised the company $1.6 billion from an investment by Counterpoint Global.
4. Epic Games
If you're a gamer, then you know about Epic Games. If you're not, chances are you've heard about the company's work.
For starters, Epic Games is the mind and Engine behind Fortnite. This ultra-popular game has more than $350 million accounts and over 2.5 billion friend connections.
Epic Games is also the maker of other popular games such as Gears of War, Fall Guys, Rocket League, Bulletstorm, and Infinity Blade. The company has had a knack for games that sell since it was established more than three decades ago in 1991.
It doesn't stop there.
Epic Games is the developer of Unreal Engine. This software powers most of the world's A-list games and is widely used across various industries, including simulation, film, T.V., automotive, architecture, and manufacturing.
Epic Games also runs Epic Games Store and Epic Online Services. Together, this grand platform supports an end-to-end digital ecosystem for creators, developers, and users.
It's not hard to see why investors are looking forward to this potential 2023 IPO. The company's long history of chart-topping games and seemingly blooming future guarantee a successful offering.
That's despite the recent $520 million penalty from the Federal Trade Commission for violating privacy laws and misleading customers into in-app spending.
Currently, the private valuation of Epic Games is around $30 billion. The company generated a total of $6.4 billion over 11 funding rounds; the most recent one in April 2022 raised $2 billion from an investment by Sony and KIRKBI.
Additional backers of Epic Games include Disney Accelerator, Smash Ventures, Kleiner Perkins, and Lightspeed Venture Partners.
The exact details of the EPIC Games' IPO are still unannounced, although rumours about the transition have been circulating since 2021. Hopefully, the revived market conditions in 2023 will give the company the push it needs.
Last but not least, let's talk about Stripe.
Ranking first in the industry, Stripe is a SaaS company (software-as-a-service) that simplifies online payment and checkout processes for a massive profile of businesses.
Stripe allows online sellers to complete transactions quickly and smoothly. As one of the most reliable online payment processors, it seamlessly collects money and moves funds across borders.
The company also protects payers by blocking suspicious payments and flagging fraudulent transactions.
Stripe has a long and impressive list of customers, including some of the biggest names in the online market, such as Amazon, Shopify, Alphabet, Apple, and Lyft.
In 2021, Stripe processed more than $640 million in payments. Although the company attributes a good chunk of the 60 per cent growth to the pandemic, it's still a booming success.
Founded in 2009, Stripe is only second to Paypal in the payment processing scene, with just under 20 per cent market share compared to PayPal's 42 per cent share.
Stripe does have the intention to go public with the SEC. An application was filed in late 2021, but the company is yet to set a clear date.
It will happen soon enough, though, and it'll make for a nice long-term investment. If the fund rounds are any indication, the company can't hold off on venture capital forever.
Currently, the valuation of Stripe is around $75 billion and could reach $100 billion by the time it gets listed. This would make it one of the largest IPOs in history.
The company generated a total of $2.2 billion over 20 funding rounds; the most recent one in June 2021 raised an undisclosed amount from a private investor, but the round in March 2021 brought in $600 million.
Backers of Stripe include Allianz X, Baillie Gifford, NTMA (National Treasury Management Agency), Fidelity, General Catalyst, Andreessen Horowitz, and Sequoia Capital.
Other IPOs to Look Out for
These aren't the only Upcoming IPOs in 2023. The following are some other offerings that may make an appearance.
● Mobileye ($17 billion estimated valuation)
● ezCater ($1.6 billion estimated valuation)
● Discord ($15 billion estimated valuation)
● Vinfast ($30 billion estimated valuation)
● Instacart ($24 billion estimated valuation)
● TikTok ($300 billion estimated valuation)
● Fanatics ($40 billion estimated valuation)
● Chime ($24 billion estimated valuation)
It's no secret that 2022 has been a year to forget for IPOs. A lot of companies put a hold on their plans for a public listing and preferred to wait until the market regained some of its stability in 2023.
Even if the scene is rocky, venture capitalists still want their payday. So keep an eye out for upcoming IPOs in 2023, as most of them could still go ahead.
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The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions.