These companies have been making waves in their respective industries and are expected to continue to do so as they go public.
The technology industry has been a driving force in shaping the global economy for decades and the initial public offerings (IPOs) of technology companies are often highly-anticipated events. In 2022, the tech IPO market saw a slowdown compared to the previous year, 2021.
2021 saw several record-breaking debuts, including electric carmaker Rivian, restaurant software company Toast, cloud software vendors GitLab and HashiCorp and stock-trading app Robinhood. However, in 2022, the only significant tech IPO in the U.S. was that of Intel’s Mobileye, a company specializing in autonomous vehicle technology. According to FactSet, Mobileye raised close to US$1 billion. While 15 IPOs raised at least that amount in 2021, no other tech IPO in the U.S. reached even US$100 million in fundraising in 2022.
As we move into 2023, it remains to be seen whether the tech IPO market will pick up again and whether we will see a resurgence of high-profile IPO deals. However, several companies are expected to go public this year and have generated significant interest from investors, analysts and industry experts. We bring you a list of some of the most awaited public debuts of 2023.
Stripe
U.S.-based payment processing software company Stripe’s IPO is considered one of the most heavily anticipated listings of 2023. Founded by brothers Patrick Collison, the CEO, and John Collison, the President, it has grown to become one of the most reputable and valuable fintech companies worldwide, with over 12 years of experience and over US$2 billion in funding.
As a payment processor, Stripe allows businesses to easily accept a wide range of credit and debit cards and other payments, including mobile wallets and buy now, pay later services. The platform is a popular choice for businesses that make most of their sales online.
In July 2021, Stripe filed its intention to go public with the U.S. Securities and Exchange Commission (SEC) but hasn’t made any significant moves since. According to Crunchbase, it is expected that Stripe may take the IPO route in 2023. However, the company may be valued only at around US$74 billion, 28 percent lower than the initially projected US$95 billion due to current market conditions. If market conditions do not improve, the company’s value may decrease further after it goes public. This move to lower the valuation could also be a way for the company to be more realistic about its valuations and make it more attractive to potential investors.
Databricks
San Francisco-based Databricks provides a software platform that helps its customers integrate analytics across various aspects of the business, such as data science and data engineering, for a cohesive understanding. The company raised US$1.6 billion in August 2021, putting its valuation at US$38 billion. At that time, the company was on track to generate US$1 billion in annual revenue, growing 75 percent year over year.
Despite being considered one of the top IPO candidates for 2021, it has not yet gone public. However, the company’s CEO in question, Ali Ghodsi, has discussed the possibility of going public in February 2022 but has not provided any specific timeline for when this may happen. He stated in an interview that the company is not in a rush to go public and is on a long journey.
According to research firm CB Insights, the market for Databricks’ products is estimated to reach US$130 billion by 2025. Some experts believe that Databricks could be the next big IPO in the data analytics sector, following its rival Snowflake Inc’s successful public offering in 2020. The company announced that it ended 2021 with more than US$800 million in annual recurring revenue, representing an 80 percent increase from the previous year. This is noteworthy as Snowflake, a data analytics platform, went public in 2020 and had an estimated US$530 million in annual recurring revenue. It appears that Databricks is ready for an IPO this year based on its strong financial performance.
Oyo
Oravel Stays Ltd., the Indian hospitality tech company behind Oyo, is planning to launch its long-anticipated IPO in 2023. However, according to reports, the company will likely delay its IPO plans. This is because the Securities and Exchange Board of India (SEBI), the regulatory body for the stock exchange, has asked Oyo to update its draft red herring prospectus (DRHP). The DRHP is a document companies file with SEBI when they plan to go public. It contains all the information that investors need to know before buying shares in the company, serving as a preemptive step before filing the actual prospectus.
The SEBI has asked the company to provide updated financial disclosures for the September quarter of FY23 in its original DRHP filing before moving forward with its IPO. However, the process of providing updated financial disclosures can take time. As a result, Oyo’s IPO is likely to be delayed and rolled out in the second half of 2023. It’s important to note that this is an estimation, the regulatory process and market conditions can change, and there is no guarantee that the company will go public.
Instacart
U.S.-based Instacart is a technology-driven, same-day grocery delivery and pick-up service that allows customers to place orders online or through its mobile app. The company has not officially announced plans for an IPO. However, it has been reported that Instacart may go public in the first half of 2023.
According to Kamran Ansari, Greycroft Board Partner and former Pinterest (PINS) Head of M&A on Yahoo Finance Live, Instacart is particularly ready to roll. The company has reportedly reduced its internal valuation from US$40 billion to US$10 billion as a result of being realistic about market expectations. He also mentions that the company has US$2 billion in revenue and has turned profitable, further strengthening its position to go public.
Instacart’s valuation has decreased significantly over the year, going from US$39 billion to US$24 billion in May 2022, then to US$15 billion in July 2022 and finally ending at US$10 billion in December 2022.
While there is always speculation as to which companies will have the most successful IPOs, 2023 promises to be an exciting year for the tech industry, with many anticipated public debuts like those included on this list. However, it’s worth noting that many factors can influence a company’s decision to go public, including market conditions, company performance and the regulatory environment. Therefore, the above list should be considered speculative and subject to change.
Also read:
- Asian Startups Set to Join the IPO Race in 2022
- The Pros and Cons of Going Public through SPAC
- Major Tech Layoffs of 2022
- Popular Startups That Witnessed a Downfall in 2022
Header image courtesy of Pexels
