Dear Startup Investor,
Last year was a record-breaker when it comes to IPO activity, with 2,388 companies joining the public markets (up 64% compared to the year before).
During that same time, global venture investment totaled $643 billion – an incredible 92 percent jump since 2020.
In other words, last year’s IPO surge wasn’t a fluke, nor did it mark a “last big push” before a coming lull. That flood of VC capital means there’s a bigger pipeline than ever of startups marching towards an IPO this year.
Keeping a close eye on those success stories can help make you a better angel investor. You’ll start to notice similarities between those startups that do make it to the ultimate finish line… and eventually, you’ll find you look for those qualities in your own portfolio.
Plus, while getting in on the ground floor is the best way to make life-changing returns, there’s another little-known way you can beat other investors to the punch on IPO day: by accessing “rights” to these companies before they hit the public markets.
The key, of course, is to be prepared for those debuts before they happen. We’re here to help.
Here are the 10 companies we’re most excited about that are likely to go public this year.
- Epic Games
Epic Games is the video game startup behind Fortnite, one of the top 10 most popular games on the planet. With 350 million registered users and over $5 billion in annual revenue, this gaming behemoth was most recently valued at an incredible $29 billion.
This online learning platform offers online classes taught by celebrities and experts – including Neil deGrasse Tyson, President Bill Clinton, and Bill Nye the Science Guy – for a monthly fee. Currently valued at about $2.75 billion, MasterClass is a prime candidate for an IPO this year.
Plaid is a fintech company that provides secure connections and verification services so that customers and financial institutions can transfer money safely and efficiently. In 2020, Visa announced plans to acquire the startup for $5.3 billion – a move that was ultimately squashed by the U.S. Department of Justice. Now, it looks like an IPO is the most likely exit for Plaid.
Originally designed to help developers communicate with each other, Discord’s chat servers really took off when gamers discovered it. Microsoft offered to buy the startup for a whopping $10 billion in 2020 but was turned down. With a most recent valuation of $15 billion, Discord is one of the biggest no-brainers on this list.
This Swedish “Buy Now, Pay Later” startup is one of the most hotly anticipated IPOs this year. Its last funding round, led by SoftBank’s Vision Fund, gave it a $45.5 billion valuation – and most experts agree an IPO is likely right around the corner.
Chime is a digital banking app with a mission to redesign the way millennials manage their money. It has 14 million customers and counting – each of which generates revenue for Chime every time they swipe their branded debit card. And its last funding round was led by Sequoia Capital Global Equities – a branch of Sequoia that “focuses on the IPO and beyond.” If that’s not a sign that Chime is about to go public, we don’t know what is.
This startup is tricky to explain, so bear with us. Databricks creates tools that help companies view all different types of data in a single place – what the startup calls a “data lakehouse.” With a $38 billion valuation, this is one of the most highly-valued private companies we’ve seen… And that means its logical next step is an IPO.
- Impossible Foods
This purveyor of lab-grown meat alternatives – like the Impossible Burger – last fetched a $10 billion valuation, thanks in part to its impressive distribution. Its fiercest competitor, Beyond Meat (Nasdaq: BYND), went public in May 2019 at about $66 per share. Two months later, it had nearly tripled in value – and while it’s back down to where it started now, investors will be watching this one closely in hopes of a repeat performance.
The most anticipated fintech listing of 2022, Stripe is a payment processing giant that boasts millions of ecommerce clients. Its astronomical $95 billion valuation is almost unheard of for a private company – and we’re waiting with bated breath to find out if this is finally the year they’ll hit the public markets.
This on-demand grocery delivery platform tripled its revenue in 2020, as more people opted to pay a premium in order to avoid going to the grocery store. Instacart’s valuation has doubled not once but twice during the course of the pandemic… and there were whispers late last year of an impending offering.
Like we said before, there are two main ways you can take advantage of these IPOs, if and when the time comes (and we think it will).
You can wait for IPO day and buy shares of the newly-available stock like everybody else… but fair warning: that huge influx of investors tends to drive the price way up, sometimes within minutes of the big debut.
Your other option is to take advantage of “pre-IPO rights” – which can kick back pre-IPO-sized gains on innovative late-stage companies before they start trading on the public markets.
We’ll talk soon.
The Research Team