Forget Year of the Ox — 2021 was the Year of the IPO.
Thousands of fresh faces flocked to the world’s stock exchanges and rode the resurging market wave.
Some feared we’d face IPO fatigue in the new year, but there’s still some heavy hitters poised to make their debut in 2022.
So, who should you look out for on the boards?
Year in review
Before we look forward, let’s rewind …
As the world started to get a handle on the COVID-19 pandemic, IPOs flourished in 2021.
“In the face of the uncertain environment that 2021 promised, the global IPO market had an exceptional year, breaking records by IPO volume and proceeds consistently into the fourth quarter,” according to a 2021 report from multinational professional services network EY.
EY Global IPO leader Paul Go said the last 12 months represented the most active year for the IPO market in the past two decades.
“COVID-19 vaccine rollouts and rolling liquidity from government stimulus programs provided strong tailwinds,” he explained.
As a new quarter approached, the EY report warned investors to prepare for headwinds in the IPO market, but recommended they capitalise on the current high valuations.
“Looking ahead to the new year, both headwinds and tailwinds are in sight, which will likely impact IPO activity,” it stated.
“A combination of geopolitical tensions, inflation risks and new waves and variants of the ongoing COVID-19 pandemic that hamper full economic recovery are all at play.
“Despite all of this, relatively high valuations and market liquidity are for now keeping the IPO window open in 2022.”
Rumoured to make its stock market debut in 2022, Reddit tops our watchlist.
The social media stalwart made headlines in 2021 as the go-to hub for many a day trader amid the GameStop and AMC Theatres short squeezes.
As prices dramatically rose (and eventually haemorrhaged) the infamous r/wallstreetbets subreddit tracked it all — living up to its headline, “like 4chan found a Bloomberg terminal”.
Bloomberg reports Reddit could look to go public as soon as next month – and it wants a $15 billion valuation to boot.
The social platform is reportedly rubbing shoulders with Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) to get its pioneer off live — watch this space for updates down the line.
Discord
Just a hop across the pond in social media land, Discord is also eying a stock market debut.
It’s still not clear when the voice, video and text messaging platform will take on a ticker, but pundits are looking at the first half of 2022.
Valuations remain tough to pin down, but Discord could be worth well more than its latest US$15 billion valuation by the times it hits the boards.
The company raised US$500 billion last September and could hit either the NYSE or the NASDAQ in coming months.
Discord has found its niche in the gaming market, and COVID-19 restrictions saw it take off in recent years as gamers stayed at home and online.
Instacart
Could 2022 finally mark Instacart’s debut?
The US-based grocery and goods delivery service was poised to hit the boards late last year, but a change in plans has wannabe investors looking to 2022 instead.
According to MarketWatch, the company was last valued at $39 billion in a March 2021 private funding round.
Amid a take-up in meal kits and delivery services during COVID, many would argue that Instacart is in its prime.
Yet others still say it’s missed the boat as the world starts to come back online. It seems only time will tell if this year is right for the
Stripe
Stripe is a name you might not immediately recognise, but the company’s behind a bevy of businesses you’ll be very familiar with.
The financial services company provides a payment platform for household names like rideshare service Lyft, exercise giant Peleton and online retail magnate Shopify (TSX:SH., NYSE:SHOP).
It’s not cheap, either — Stripe carries a US$100 billion private market cap valuation, and who knows where it could go if it floats?
Nevertheless, it’s still unclear if this will be the year of the Stripe IPO, with any potential plans still far from public. Even so, we believe it’s still a stock to watch in this year’s market.
Databricks
Last — but certainly not least — on our watchlist is software firm Databricks.
With origins in academia and the open-source community, Databricks was founded in 2013 by the original creators of Apache Spark™, Delta Lake and MLflow.
Fast forward to today, and more than 5,000 organizations worldwide — including ABN AMRO, Condé Nast, H&M Group, Regeneron and Shell — use Databricks to enable massive-scale data engineering, collaborative data science, full-lifecycle machine learning and business analytics.
The business was valued at US$38 billion in August 2021 amid a funding round, led by Morgan Stanley fund Counterpoint Global, that raised US$1.6 billion.
Notably, that price tag is up from the $28 billion it was valued at in February that year.
There’s no due date set for the Databricks IPO just yet, but there’s growing interest in this prospective debutant.