This guide outlines the most important IPO launches expected this year for investors to know about. After the global pandemic, the shipping crisis, and rising inflation, several big-name IPOs are hitting the market. These include the food industry, e-commerce, fintech, robotics, and automation stock options.
What is an IPO?
If you are new to investing, initial public offerings (IPOs) are making a comeback this year. An IPO occurs when a private company goes public and sells its shares on the stock market. Private companies team up with investment banks to make their shares go public. This means they must go through an intense regulatory and marketing process before offering public shares.
Although 2022 got off to a slow start due to the global pandemic and chip shortages, many well-known companies are exploding onto the public markets this year. Some companies that go public perform well. But unfortunately, others never make the cut. For instance, although around 399 IPOs raised $142.50 billion before going public in 2021, most fell below their initial returns before the year ended.
Due to a decade of massive startup fundraising efforts and venture capital spending, a fresh wave of IPOs has turned into billion-dollar firms ready to hit the public markets at sky-high valuations. It is not always easy to tell which IPO will boom or bust despite compelling results. For example, shares crashed more than 45% in the cryptocurrency sector once the initial prices and buying frenzy decreased.
It remains to be seen which companies will boom or bust in the coming year. Now, it is your chance to check out cutting-edge new IPOs that make a difference across multiple sectors, from healthcare and financial technology to online shopping and delivery services.
Top IPO launches to watch for in 2022
1. Automation Anywhere
Latest Valuation: Just under $7 billion
It is no secret that tech automation is the way forward. Topping the IPO list for this year is a software robot company branded as “automation everywhere.” As the name implies, the firm provides a lot of back-end work to help companies develop automated software.
These bots are used to do things like entering data for HR departments, healthcare services, sales, and marketing businesses, as well as for other businesses. Automated software accelerates business operations in a big way. It reduces the amount of time needed for manual tasks. This SoftBank-backed company has an IPO in a hot sector that represents the future of technology.
2. Chime Financial
Latest valuation: $25 billion after September funding
Another IPO sector to keep on your list is the San-Francisco-based digital bank called Chime. Due to the pandemic and its convenience, digital banking is becoming more popular. It also allows people to bank from home without worrying about transportation or time considerations related to driving to a local branch.
The great thing about Chime is that it aims to offer banking services to every customer. This can help minorities, the homeless, and areas not served by traditional banking systems. Chime’s “fee-free” banking, no service or monthly fees, and customer-friendly options place it on a competitive level due to its low-cost options for regular Americans.
Chime expects to boost its valuation to $45 billion by March and has plans to go public in the future. Although the company hasn’t announced an official date yet, it would make sense that Chime is ready to burst onto the public markets after CEO Chris Brett announced in September 2020 that Chime would be “IPO-ready” in one year. At any rate, the company garners a lot of interest in IPO plans, so add this one to your list.
3. Discord
Latest valuation: $15 billion after September funding
Online chat services helped people connect as never before with work, school, friends, family, and dates during the pandemic.
While Discord has not officially announced its plans to release an IPO in 2022, many investors have kept an eye out for the company since talks about a $10 billion Microsoft acquisition that ended in April 2021.
This company is getting a lot of chatter in investor circles. Discord’s co-founder and CEO, Jason Citron, admitted to CNBC in May that, “We did receive a lot of offers.”
The company considers an acquisition a “tremendous opportunity” that 150 million active users share, but it has not currently released any specific public plans yet.
4. Impossible
Latest valuation: $10 billion
Do you love eating healthy? Impossible makes this possible for busy humans who want to fit eating well into their lifestyle. This vegan-friendly food company gives plant-based burger giant Beyond (listed on the Nasdaq in 2019 for $5 billion) a serious run for its money.
With delicious meat, fish, and dairy products created from plants, the Impossible brand is now located in 22,000 grocery stores. According to the firm’s founder and CEO, Pat Brown, going IPO is “inevitable,” hopefully in the not-too-distant future.
5. Instacart
Latest valuation: $39 billion after March funding
Like many Americans, grocery delivery services can make meals so much easier. For example, Instacart helped millions of Americans with easy food access during the pandemic by being one of the most popular delivery services.
While the company initially planned to hit the public markets last year at a rumored $50 billion valuation, new CEO Fidji Simo held off on an IPO until 2022 to expand the company’s services outside of basic food delivery options.
It looks like Instacart is taking lessons from its competitor, DoorDash, whose shares have plummeted 15% since December 2020. Instacart has made a viral advertising platform that helps retailers get their products in front of more people when they search for them.
Instacart looks to stay ahead of competitors by diversifying and broadening its services. It also promises to offer a tempting IPI that will provide a strong performance when it does hit the public market. According to insiders, who advise that the company has been working with Goldman Sachs investment bank since last fall, that time may be on this year’s horizon.
6. Mobileye
Latest valuation: estimated $50 billion
Despite pandemic shortages, it’s still automotive services that get us where we need to go. Intel (INTC) is keeping up in the automotive industry by rolling out Mobileye this year. Here is what that means if you are looking to invest:
Mobileye’s business develops advanced driver assistance systems (ADAS). The technology is in the works to create self-driving cars that could change the future driving landscape as we know it. In December, the firm initiated a robotaxi pilot program by testing the automation’s abilities to ferry passengers around the streets in Paris. With a safety driver at the wheel, employees from the Galeries Lafayette Paris Haussmann can get a ride to work in a robotaxi for four days every week.
It looks like Mobileye has the green light, after confidentially filing paperwork with the Securities and Exchange Commission, to launch in the public sphere sometime this year. If self-driving cars, automation, and robotics get you excited, this is a promising new IPO to check out in 2022.
7. Stripe
Latest valuation: $95 billion after funding in April
Along with healthcare, fintech is an exploding sector with many promising IPOs this year. Stripe’s system launches payments into the digital age by processing business payments via the internet. This offers the ability to process funds quickly with guaranteed security. Topping these at a whopping $95 billion, Stripe is one of the most eagerly anticipated IPOs on offer. Currently, Stripe is also the largest payment processing company.
From a quiet start, the company has exploded at a global level. It currently offers financial services worth hundreds of billions to many companies worldwide. Big names include Amazon, Shopify, Alphabet’s Google, and Spotify. The lead-up to an explosive IPO unveiling has tantalized the public since billionaire brothers John and Patrick Collison dangled Stripe’s payment processor in front of them for more than a year. People are excited about this new processor, but it also helps the company grow because it brings money from the public markets.
Though Stripe was said to be “very happy” as a private company in August by CNBC and by Bloomberg, this big PayPal competitor had talks with investment banks this fall, according to Bloomberg. A big market debut could launch the company over the $100 billion valuation threshold. If this occurs, Stripe will quickly burst onto the scene as one of the biggest IPOs hitting the market today.
Summary
Other factors will likely continue to impact when IPOs hit the market and how well they perform this year. For instance, the Federal Reserve’s December 2021 announcement about tripling interest rates this year due to inflation caused market volatility to soar.
Many big-name and special-purpose acquisition firms continue to actively search for available deals despite these risks. Actions like these are likely to boost a strong IPO tailwind. As a result, many IPOs, such as Instacart are likely to reach new heights in 2022. According to Wall Street experts, others, like Stripe, promise to keep up record-breaking returns.
