By: Blend Commerce
When a company announces its intention to ‘go public’ it is a big deal. An IPO, or initial public offering, is when a privately owned company lists its shares on a stock exchange, so that they can be purchased by the general public.
There are several stock exchanges around the world, but NYSE (New York Stock Exchange) NASDAQ (National Association of Securities Dealers Automated Quotations) and LSE (London Stock Exchange) are three of the biggest in the western world.
IPO’s have become trendy over recent years and whereas financial institutions, insurance companies and retailers used to rule the exchanges; more recently, tech and ecommerce companies have dominated the new offerings to the general public.
Why Do Companies Go Public?
There are many reasons why companies go public. Some of the reasons for pursuing an IPO are:
– Raising Capital – Selling shares to the public will enable you to raise the capital necessary to fund further growth, research and development and to wipe away the debts accumulated in the scale up phase of the business.
– Publicity – It stands to reason that going public generates a huge amount of publicity. An IPO will increase your brand visibility and open up a huge PR opportunity.
– Gravitas – If you are struggling to attract talent to your workforce, or you are struggling to get competitive lending terms from financial institutions, the gravitas of being a publicly traded company could give you a leg up.
What To Look For Before Investing In Stocks?
Tony Martins, Founder of Profitable Venture, has shared his input on what to look for before investing, he says,“You should have a clear idea of where the money will be used as companies go public and seek funding from investors. Knowing where your money goes should be a priority for you, as it will affect the performance of your investment. Companies that reinvest the monies raised in their operations will have a stronger motivation to expand. Companies that invest in growth efforts are more likely to have a longer-term vision and give a more secure investment.”
With Sue Hirst, CFO of On-Call adding “The pros of investing in an IPO are the potential for higher returns over time. The average return on IPOs is about 1% more than an equally risky stock. Another pro to investing in IPOs has the opportunity to buy shares while they are not so expensive. There are also no commissions for investing in IPOs, other than the fees for brokers that are typically charged by the various exchanges where you invest. The cons of investing in IPOs are that you have less control over your stock away from other companies’ decisions and the risk of buying shares when other investors are not interested in them, leading to lower prices.”
Who Do We Tip To IPO Over The Next 12 Months?
We’ve been a part of the tech, software and app development industry for many years; and through our research we’ve collated a list of 10 incredible companies who we believe will successfully IPO over the next 12 months. And as we have been saying for year; the future is Tech.
2022 is going to be the year of FinTech and Software, so keep an eye out for these top picks.
Founded by brothers John and Patrick Collison, Stripe started out in a small Dublin office, and has grown to take over the payment processing industry. At just 12 years old with the founders now in their early 30’s, Stripe has grown to more than 4,000 employees across the globe, taking over $7.5bn per year in revenue.
They’ve long been tipped to go public, and we think that 2022 could just be their year.
Everyone has heard of Tesla, arguably the first and most dominant force in the Electric Vehicle market; but don’t ignore Rivian who have gradually been gaining ground on their better known competitor. RJ Scaringe’s company is tipped to IPO to a market cap valuation of nearly $30bn; which is outstanding considering the first cars rolled out of the manufacturing plant just 2 short years ago.
Tipped to go public in 2022 (if not before) and with EV being the forerunner in a climate change revolution, Rivian are set to do well.
You will be hard pressed to shop online without hitting a store that offers FinTech powerhouse Klarna’s payment solutions. The concept of ‘buy now pay later’ isn’t new, credit and credit cards have been in existence for decades; but merging that into the transaction process on an e-commerce store is a true innovation.
More than 300,000 merchants and more than 100 million active customers, Klarna are expecting to IPO in the coming months with a $45.6bn market cap.
Discord, previously known as Hammer and Chisel is the brainchild of Jason Citron, the entrepreneur who founded and sold OpenFeint at 26 years old for $104m; and Jason has his sights set a lot higher this time around with Discord forecasted to IPO at a market cap of $15bn early next year.
The VOIP, IM and Video Conferencing Software benefitted hugely from the COVID Pandemic as businesses propelled their efforts to go online; and for Discord, that trend hasn’t slowed. Watch out for Discord!
Another FinTech company coming out of San Francisco is Chime. Chris Britt, and his team have amassed $5.8bn assets since incorporating 8 years ago. This fee-free mobile banking technology has already been through many fund raises, but going public is definitely the businesses next step.
Forecasting a market cap of just under $15bn is a steal for investors when they go public in the next few months.
Yet another FinTech company. Trustly is a Swedish outfit headed up by CEO Oscar Berglund and founded by Carl Wilson and Joel Jakobsson. Trustly is an open banking payment method that allows customers to shop and pay direct from their bank accounts.
The market cap is set to amass $11bn and our research suggests that they’re tipped to go public early in 2022.
Yes, we know, we know, more FinTech (2022 will be the year of FinTech – mark our words) Sorry not sorry! Not to be confused with the painstaking Brexit, Brex is a SanFran native that offers business credit cards and cash management to fellow technology companies. Co-founders Henrique Dubugras and Pedro Franceschi have history, having founded Pagar.me before selling it to Stone.
Don’t underestimate Brex as they take on traditional financial institutions.
We’ve really been tracking AirTable, they bring out our inner tech geek. Founded in 2012, this tech company’s core product is a low-code platform for building collaborative apps. Their first fundraise was way back in 2015, when they secured $3m from a series round fronted by Freestyle Capital; and they’re now worth nearly $6bn albeit with only $85m in revenue.
On their first trading day we believe they will either fly or plummet like a stone, either way, they are certainly one to watch in 2022 as they strive to go public.
We’ve said 2022 is going to be the year of Tech, and it is, but with the pressure on us all finding more sustainable routes to live, we couldn’t ignore AllBirds. Sustainability is front and centre of everything that they do, founder Tim Brown has built up a $100m+ business in just 5 years, all from the comfort of our favourite place, Shopify! A dream client for us, yes (Tim if you are reading this please reach out), but more importantly an incredibly environmentally friendly business.
Current market cap is estimated to be around $2.2bn, and when this goes public in early 2022, we’ll be watching closely.
10) ReCharge Payments
We have the inside scoop on ReCharge so trust us when we tell you that these guys are going places (*our inside scoop is limited to the power of our partner status with them). Having raised $35m in September of this year to give them the tools to scale up faster, and develop bigger than before. Oisin O’Connor heads up this tech company, which is enabling ecommerce businesses across the globe to offer subscription revenue streams, has already built the company to an estimated $2.2bn, and we suspect it’ll be a lot more come their IPO day in the future.
Where We Come In?
BlendCommerce partner with some of the biggest, best and most innovative forward thinking tech / software companies in the world; including Klaviyo, who have already gone public; and while we can’t give you financial advice, if you’re an ecommerce business, we can give you advice on your tech stack and help you grow, so that one day you’ll be planning for your own IPO.