The year 2022 marked a significant decrease in the number of companies going public. Due to the market’s volatility, many postponed their preplanned public offerings until 2023.
In these challenging times, profitable companies with successful management practices can still manage to thrive, with some of the most anticipated IPOs in 2023. However, as experts expect the market to recover slowly, we’ll list 7 IPOs to watch in 2023. So, let’s dive in.
Most Anticipated IPOs to Watch In 2023
Not only did the number of IPOs decline significantly in 2022, but many stocks lost their value, too. This made going public a perilous decision, even for the most established companies.
With employees losing their jobs and firms downsizing or limiting operations to reduce costs, posting an upcoming IPOdidn’t seem like the wisest decision.
Experts believe the IPO market hasn’t yet recovered, but there’s a big chance of a rebound later this year. Challenges are more apparent in the tech market, but overall, the market is unlikely to show noticeable improvement until the second half of the year. Here are some of the most anticipated IPOs in 2023.
With the growth of online payment marketing, Stripe has managed to become one of the world’s largest and most successful payment platforms. This SaaS company offers several financial solutions to individuals and enterprises, including fraud detection, helping companies register as corporations, online banking, and processing payments.
Over 20 funding rounds, Stripe stock raised over $2 billion in capital, becoming the second-largest payment gateway after PayPal. However, the company’s valuation fluctuated over the past two years, falling from $95 billion to its current valuation of $63 billion due to layoffs and the volatility of the fintech market.
Stripe initially considered going public in 2021, mainly to pay a tax bill. Yet, the company decided to wait for 12 months since the lead investors weren’t excited about an IPO that wouldn’t result in expanding operations or increasing the value of their investment.
Plans to go public were postponed in 2022 when the whole market hit a pause. Although experts initially thought going public would increase the company’s value to about $100 billion, the founders, the Collison Brothers, decided to wait for the second time.
Changes in the market didn’t affect Stripe alone, and there’s no way the company could hold off an IPO forever. The management is waiting for the right time to guarantee that this route will achieve a desirable outcome. Analysts expect a StripeIPO soon, although the date is yet to be set.
The social news and discussion network Reddit announced it would go public in 2021. The company maintained its status as a privately held company for years until raising funds through funding rounds proved to be unsuccessful. An IPO would be the only solution the company has to continue operating in a growing and highly competitive market.
Things started going south for the front page of the internet, as Redditors call their favourite platform. Giants like Meta struggled with declining daily users, and Reddit would naturally deal with the same challenges or worse. Moreover, Reddit was caught up in several highly publicised controversies regarding freedom of speech.
Back in 2021, analysts valued Reddit at $15 billion, compared to its current valuation of $6.6 billion. This decline is mainly attributed to the volatile market condition, the overall decline in tech stocks, interest rates, and inflation. As a result, the company decided to postpone its IPO to 2022.
When the whole market hit a halt in 2022, it was apparent thatthe Company wouldn’t be able to go public. So, experts believethe highly anticipated Reddit IPO is due during the second half of 2023.
Its users have much awaited the Reddit IPO, so they can invest in the platform they love and use daily. Moreover, with the current valuation, Reddit stock might be available for an affordable price, presenting a lucrative investment opportunity.
For the past 24 months, financial experts and analysts mentioned Databricks several times when discussing upcoming IPOs. Yet, the American software company stayed silent regarding its public plans.
Experts valued the company in late 2021 at $38 billion after successful funding of $1.6 billion by Counterpoint Global. It represented an increase of $10 billion from an earlier valuation in February 2021, which estimated the company’s value at $28 billion.
At the end of 2021, Databricks reported $800 million in revenue, and investors wondered when they could invest in this growing and seemingly successful company.
With a focus on expansion, hints have been thrown here and there regarding the Databricks IPO since 2021. Yet, the tech company postponed all plans after the economic crisis that affected the stock market in 2022.
Hoping things would soon improve, Databricks postponed its IPO plans to late 2022 and then again to 2023. Experts believe that this will be one of the most successful and valuable public offerings once done. In addition, it’s expected to increase the company’s valuation tremendously, which makes Databricks stock quite desirable to many at this stage.
Yet, on the other hand, other people are still skeptical about the success of this move. Since the end of 2022 marked the great SPACs crash, many companies are silently waiting for the market and prevailing circumstances to shift.
Although Databricks is more likely to go for a traditional public offering than a SPAC, the company is currently waiting for the market conditions to improve before it can resume its growth plans.
The English software and semiconductor design company has picked a tricky time to go public. Yet, the Arm IPO is one of the most anticipated of 2023.
After being bought by SoftBank Group in 2016, the company has been going strong with an overall revenue of $719 millionduring Q1 of 2022, representing a 6% increase year-over-year, and a quarter royalty of $435 million, which is the first quarter royalty to exceed the value of $400 million.
However, ARM’s luck started to change when the deal between SoftBank and NVIDIA to sell the company for $80 billion failed in February 2022. This would have been a profitable decision allowing the company to expand its operations.
Instead, the company announced it would go public, setting the date in late 2023. However, experts believe this will be a risky decision, given the volatility of the tech market.
Before being sold to SoftBank, ARM was a dual-listed firm in New York and London stock exchanges. UK ministers are currently encouraging the company to get listed on the LSE, although there’s a big possibility that SoftBank would choose to dual-list ARM instead. Meaning Arm stock will be available on both markets.
The primary purpose of the IPO is to increase the ARM valuation to $40 billion, pay private investors, and give stock options as incentives to employees. On the one hand, the upcoming ARM IPO seems like a good investment opportunity. Still, on the other, the market needs to gear up, or the company will most probably wait for an additional period before going public.
Instacart is a grocery delivery startup that was planning to go public in 2022. However, with the downward spiral that hit the market in 2022, the Instacart IPO plans have gone on hold. In addition, the Instacart valuation decreased by more than 40% to $24 billion to adapt to the current market conditions.
Yet, with people making more orders online, Instacart considered an IPO, which is regarded as a brave move, given the global situation.
Experts say the company hasn’t withdrawn its Securities and Exchange Commission filing for an IPO, so it’s still on the table. Yet, it’s definitely waiting for a market to improve before it goes public to be able to achieve the desired outcome.
Luckily, the 2021 and 2022 unfavorable market conditions didn’t hit Instacart that hard, as people were more interested in its services. In 2021, the company had a revenue of $1.8 billion, representing a 20% increase from the previous year’s revenue.
This happened after it had to cut down its valuation two times in 2022, finally reaching a valuation of $10 billion in January. Moreover, it had to lay off about 3,000 employees and stopped hiring new ones.
Yet, some investors still believe that acquiring Instacart stockwould still be a good investment plan at this stage.
Discord is a voice-over IP and instant messaging social platform that allows users to communicate using voice calls, video calls, text messages, voice messages, video messages, and sharing media files. These messages and calls are sent privately or shared publicly in communities called servers.
The company has been going strong since it was founded in 2015, with currently more than 150 million monthly active usersand 13.5 million communities. This platform is extremely popular among gamers, as the app facilitates searching for and adding users.
Although there was no public information about a Discord IPO, experts believed that the company had decided to go public after it turned down a buyout offer by Microsoft in late 2021. The proposal was made for $12 billion, and the management believed the company was worth more.
The Discord valuation was at $15 billion and increasing its profits amidst the international global market crisis by offering premium subscriptions for content creators. This decision made potential investors more interested in the company, as the revenues are expected to multiply.
The online messaging and calling app hasn’t yet filed for an IPO and decided to decrease its valuation in late 2022 to be more reflective of the current market’s conditions, with a current valuation between $10 and $15 billion. Yet, it seems like 2023 will be the year this company expands its operations in a highly competitive market, many investors are looking forward to when Discord stock will become available.
7. Chime Financial
Chime Financial is a fintech company that offers fee-free mobile banking services. It provides personalized banking services to individuals and makes most of its money from interchange fees.
In March 2020, Chime managed to raise $485 million in funding and was valued at $14.5 billion. This valuation increased to $25 billion in August 2020, when the company raised an additional $750 million in funding.
Chime’s CEO announced that the company would consider going public in a year. Yet, these plans were delayed to March 2022 and then to the last quarter of 2022 due to the volatile market conditions, as the fintech stocks dropped by more than 40%.
With a new recession around the corner, the average Chime customer will likely make less money as the market conditions worsen. As a result, customers might be spending more money on necessary goods, but they might be unable to maintain their spending for long.
As a result, Chime found itself stuck in the middle between looking for funding to expand its operations and choosing the best funding route. The company decided that the best way to continue growing is to offer other services besides online banking services.
Chime IPO plans are still being considered, but they have notfiled for one yet. The company might decide to go public after all, fearing that a competitor will take a leap of faith and collect the investors’ funding it aims for. Chime stock would have to be sourced privately for an investor to get involved at this stage.
Experts believe that the proposed IPO date will be toward the end of 2023. It will definitely represent a markdown from the last Chime valuation of $25 billion.
2023 might be a big year for several companies in various sectors and industries after the stock market faced several challenges in 2021 and 2022.
Some companies have already announced their IPO plans and seem to be determined to go public, no matter what. These are usually the companies that failed to secure another funding or are relying on their growing business and the trust of investors in their products and services.
Yet, many will choose to postpone their plans if the market conditions don’t improve. There might indeed be a slight improvement in the stock market, but with the record high inflation rates, some experts advise CEOs to wait before listing for a public offering. Nevertheless, the market might show some improvement towards the second half of the year. Experts are waiting to see what will happen.
How to invest in IPOs
Currently, there are limited ways of investing in upcoming IPOs, such as the ones mentioned in this article, since the company’shaven’t been made public yet. For the best chance of acquiring these stocks early on sign up with eToro as they will make IPOs such as these available to you as early as possible.
If you are in the USA register for these IPOs here.
For the majority of the rest of the World (Europe, UAE, Australia etc), register for the upcoming IPOs here.
If eToro is not available in your country then sign up with Switchmarkets as they will make new listings such as Reddit, Arm, Discord etc available to you as soon as possible.
For both eToro and Switchmarkets you’ll need to register and fully activate your account by making a deposit to qualify and to be able to register for these positions.
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. We hold no stock or interests in any of the Companies discussed on this website/app.