In today’s article, we will look at how things went in the IPO market last year, and talk about the Top 5 of the most anticipated IPOs in 2023. Find out which companies are planning to go public in the nearest future, and their estimated market capitalisation.

IPO market happenings in 2022

Compared to the record number of IPOs that took place in 2021, last year was a huge disappointment: the number of IPOs declined by 45%, making 2022 IPO revenue drop by 61% as a result. Due to poor preliminary evaluations, almost all large IPOs scheduled for 2022 were postponed for a year.

This was mainly attributed to the increase in stock market volatility, the tough monetary policy of the CBs in developed countries, and the worldwide growth of inflation. Companies that had gone public in 2021 were losing in value, enhancing the negative IPO market sentiment.

Last year, 23% of the placements were in the tech sector, while most of the money was attracted by the energy sector, which accounted for 22%. The reason was the rise in the prices for energy carriers.

1. SpaceX IPO – 143 billion USD

SpaceX IPO

The SpaceX company is one of Elon Musk's most ambitious projects. It develops and launches the multi-use carrier rocket Falcon and spacecraft Dragon, as well as provides satellite internet access coverage to 45 countries through its satellite constellation Starlink. The company was estimated at 143 billion USD in 2022.

In 2022, the number of active Starlink users skyrocketed, growing by more than 300% to 1 million. Revenue might have reached 1 billion USD. There is no news about the income generated by the spaceship launches. We will find this out from the prospectus that SpaceX will be presenting when applying for the IPO.

SpaceX is expanding into space tourism as a separate business. In this respect, it is working on developing the Starship spacecraft aimed for transporting astronauts to Mars and the Moon.

2. Stripe IPO – 68 billion USD

Stripe IPO

Founded in 2011, Stripe specialises in developing software for integrating bank payment systems with online resources. The company was valued at roughly 68 billion USD in autumn 2022.

The following are among Stripe clients: Meta Platforms Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOGL), Amazon.com Inc. (NASDAQ:AMZN), DoorDash Inc. (NYSE:DASH), Peloton Interactive Inc. (NASDAQ:PTON), Zoom Video Communications Inc. (NASDAQ:ZM), Shopify Inc. (NYSE:SHOP), and other large corporations. According to Accenture, the global market of payment systems might reach 2 trillion USD by 2025.

3. Databricks IPO – 31 billion USD

Databricks IPO

Databricks was founded in 2013. The company develops software for the analysis of huge volumes of data. According to Business Wire research, the global big data analytics market will have reached 142.5 billion USD by 2024.

The number of Databricks clients have exceeded 5,000 companies, including Comcast Corporation (NASDAQ:CMCSA) and T-Mobile US Inc. (NASDAQ:TMUS). In 2020, the revenue of the company increased by 75% to 350 million USD compared to the results of 2019. And in 2022, sales volume could have exceeded 500 million USD. Databricks is valued at around 31 billion USD.

The company’s competitor is Snowflake Inc., whose IPO brought investors a net profit of 171% over the lockup period. This makes the expected IPO of Databricks particularly attractive to investors.

4. Discord IPO – 15 billion USD

Discord IPO

Founded in 2015, Discord is a VoIP and instant messaging social platform mostly popular with gamers.  It allows for instant communication (talk over voice, video, and text) for example during games, while minimising the risks of connectivity loss. It works on all operating systems (OS), is available in both mobile and web versions, and can be integrated with the Xbox and PlayStation consoles.

Discord is valued at roughly 15 billion USD. The number of active users has exceeded 140 million USD worldwide. The company sells Discord Nitro subscriptions that give access to personalised emojis, stickers, tags, animated avatars, and other unique functions.

5. Reddit IPO – 10 billion USD

Reddit IPO

Reddit the user-generated social networking site, was founded in 2005. Its audience currently exceeds 52 million people worldwide, with the majority still based in the US. The revenue of the company is mainly made of the Reddit Gold subscription and digital ads.

In August 2021, Reddit was valued at 10 billion USD. However, this evaluation is no longer valid, owing to the situation in the corresponding market, the info about the slowing growth of new Reddit users, and its upcoming IPO.

Reddit grew especially popular thanks to the WallStreetBets community. Users of the community pumped up the shares of GameStop Corp. (NYSE:GME), which was on the verge of bankruptcy, thereby creating the phenomenon of meme stocks.

Summary

The 2022 interest rate increases in many countries had a great impact on the IPO market. Almost all major IPOs were postponed to 2023. The Top 5 list of the most anticipated IPOs in 2023 includes SpaceX, Stripe, Databricks, Discord, and Reddit.


The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.


Material is prepared by

Vadim has a higher education in finance and economics. He started becoming familiar with financial markets in 2012, and now specialises in analysing IPOs and portfolio investments.