This has been a year to forget for IPOs. By the beginning of November, there had only been 66 IPOs in the United States in 2022 - down nearly 90% on the same time period in 2021.
This dearth of new companies, particularly in the tech space, reflects a year in which tech stocks were battered. Even the so-called FANGs no longer look as reliable as they did just a year ago.
From January to November, Facebook lost three-quarters of its value, as investors expressed their concern about CEO Mark Zuckerberg’s costly fixation with the metaverse. His response was to lay off 11,000 employees Amazon announced in November that it was to lay off around 10,000 employees across the globe as consumers cut back on their online spending.
In total, so far over 70,000 employees have lost their jobs in the tech sector.
Who’d want to enter the market in those conditions? Not many. One look at the IPOs (tentatively) planned for 2023 shows many that were also supposedly planning a market listing in 2022. Events took hold. Assuming some stability arrives in the first half of 2023, many of these could still go ahead. Ultimately, venture capitalists need their payday, even if the markets are rocky.
For those still considering IPOs in 2023, DealRoom has the tools for you to make it a success. Meanwhile, here are the most highly anticipated IPOs for next year.
Why not check out: 11 Best and Most Anticipated IPOs from 2022 (+ 2021) or the 11 Biggest IPOs of All-Time
Estimated Valuation: $17 billion
Expected IPO date: Q4 2022
Intel subsidiary Mobileye is likely to be one of the more sought-after IPOs in 2011. The world’s booming demand for microchips and semiconductors is unlikely to fade in the same way as social media, owing to their use in just about everything. Mobileye manufactures chips and software for self-driving car technology and advanced driver assist systems, which are finding their way into most cars now.
Intel acquired the company for a massive $15 billion in 2017 and intends to remain the major shareholder after the potential IPO - likely to be in the first half of next year. It is filing for IPO with the SEC shows that it values the company at $17 billion - well below where it was expected to be priced, but perhaps an indication that the listing is going ahead regardless of the turbulent market conditions. The company’s revenues hit $1.4 billion in 2021.
Estimated Valuation: $70 billion
This time last year, a prediction was made that Stripe would be listed at a valuation of $100 billion. Since then, its founders, the Collison brothers, have said that they were preparing for “leaner times” and were laying off 14% of the company’s staff. What became abundantly clear is that if companies like Amazon, Apple, and Facebook sneeze, Stripe gets a cold. Stripe will be hoping their performance picks up sooner rather than later.
Stripe registered its intent to hold an IPO with the SEC a year ago, but the date is yet to be confirmed. Like others on this list, the significant VC funding that the company has received means that it cannot hold off indefinitely, even if the market isn’t what it was two years ago. Its position as the number one payments processor in the world makes it a good long-term bet, even if e-commerce sales dip in the short to medium term.
Estimated Valuation: $30 billion
Vinfast is a Singapore-based subsidiary of the Vingroup, a $5 billion Vietnamese business conglomerate. Vinfast makes electric vehicles (EVs) and is the latest of a seemingly never-ending line of EVs to hit the stock market. It plans to use the proceeds from an IPO to continue its rapid expansion, build a factory in the US, and cash in on Americans’ current appetite for EVs.
The company previously stated its intention to raise $60 billion at an IPO, but that seems overly ambitious in the current climate. We have adjusted this downward to $30 billion, noting as well that, aside from a market in turmoil, the increasing competition in the EV space won’t do the listing price any favors. There’s another sting in the tail: Vinfast has said its EV factory won’t be ready to produce until 2024 - a speculative punt in a market crying out for stability.
Estimated Valuation: $30 billion
It’s nigh on impossible to find a generalist IPO-related article from the past two years that doesn’t mention Databricks in some way. One of the few bright spots in 2022, it has grown its revenue from a little over $400 million in 2021, to more than $1 billion in 2022. Furthermore, that revenue is subscription-based - a huge attraction for investors, and perhaps even more so in a market where cash flows are so unpredictable.
A further point to note about Databricks is that one year on from the first mooting of an IPO, its AI-driven software should be even more sophisticated (following the logic of the rapid advancements seen in artificial intelligence over the past few years). It also has backing from the ‘big four’ cloud providers: Alphabet, Salesforce, Microsoft, and Amazon, meaning it’s backed by smart money that most unlisted companies would dream of.
Estimated Valuation: $10 billion
Reddit is one of a few companies from this list that filed its intention to hold an IPO in late 2021, without mentioning a date. For the subsequent 12 months, speculation has been mounting about when that data might fall. With social media giant Meta facing falling user numbers and activity across its platforms, the space may not need another player like Reddit. Even with massive daily active users (DAU), Reddit is counting on digital advertising rebounding.
The digital advertising falloff is exhibited in stark terms at Reddit, whose revenue fell from a projected $421 million in 2021 to $350 million. Albeit this number reflects a 150% growth on a year before. Offering a format that is more similar to Twitter than other social media platforms, Reddit may even benefit from Elon Musk taking his latest purchase private. We still see the listing price being significantly lower than it was a year ago, however.
Estimated Valuation: $15 billion
Unlike many others on this list, we’ve maintained Discord’s IPO valuation at the level it was at one year ago. The company’s projected revenue for 2022 is set to top $200 million, up from approximately $150 million in 2021. Plus, as Microsoft’s massive acquisition of Activision Blizzard at the beginning of 2022 indicates, the gaming world - particularly online gaming - is set to continue on its upward trajectory. Discord, with its massive user base of gamers, will be a beneficiary of this.
Another thing working in Discord’s favor is that it isn’t solely relying on digital advertising revenues. Its 140 million active monthly users point to a future of massive subscription revenues - something investors have been traditionally keen on. The company has yet to file for an IPO with the SEC, but 2023 seems increasingly probable now.
Estimated Valuation: $24 billion
Few companies have taken a valuation drop as steep as that of Instacart over the past 12 months. At that time, with an IPO on the horizon, the company was aiming for a valuation of $50 billion. But with the number of people ordering meals online falling off substantially after the pandemic, the company took the rare step of revaluing itself in early 2022 - by over 50% to $24 billion. In the same breath, its executives said that a 2022 IPO was being shelved.
In the meantime, the management team is reportedly cutting back significantly on expenses in an effort to bring the company public in 2023. A big question on investors’ lips will be the breakdown of the company’s revenues. Too much dependence on deliveries in any one area (say, deliveries from pharmacies or big box retailers) may make the stock look volatile. It will still be a big one, and it looks like 2023 is the year.
Estimated Valuation: $300 billion
How long can a social media darling expect to remain a social media darling? That’s the question many will be asking after looking at falling user numbers at companies like Facebook and Twitter, not to mention the demise of dozens of other social media companies in the decade before. TikTok, the Chinese video-based company (which was nearly acquired by Microsoft not long ago, let’s recall) looks set to give investors a chance to reconsider the question.
Although it won’t be based on an American exchange owing to ongoing hostility between the United States and China, TikTok will most probably list on the Shanghai or Hong Kong exchanges at some stage in 2023. Parent company ByteDance announced a share buyback in the second half of 2022, which valued the company at around $300 billion - a full 33% lower than the valuation in 2021. Could it be losing its social media darling status already?
Estimated Valuation: $24 billion
Chime had filed for a March 2022 IPO, but there was one problem: When February 2022 came around, fintech stocks were down by around 40% in just six months. Others, like Paypal and Block, were down over 60%. The Chime executive team read the room, and it told them that it was time for the IPO to be shelved until a more favorable moment. Fintech stocks have barely moved in 2022, so that moment didn’t come this year.
2023 may be the year when it happens, however. The company faces a typical dilemma of many tech companies looking for an IPO; on one hand, the market at the time of a proposed IPO may not be favorable but on the other, it faces pressure to list before other non-listed competitors to enjoy the investor backing before the others do. We take the initial listing price of $40 billion down by 40% in line with the overall fintech market.
10. Epic Games
Estimated Valuation: $30 billion
Epic Games is the maker of Fortnite, the online video game with an estimated 400 million users. The company is also the creator of Gears of War, itself a highly popular game that proves it isn’t a one-trick pony. Since its founding over thirty years ago in 1991, the company has raised $4.4 billion, with its latest raise in 2020 valuing it at $28 billion. A penchant for video games among investors may bring a potential 2023 IPO listing price of closer to $30 billion.
The company’s backers include Kleiner Perkins, Lightspeed Venture Partners, Smash Ventures, Disney Accelerator, and Sony. Unlike previous IPOs in the video game space, like that of Rovio for example, Epic Games’ long history of developing multiple chart-topping video games should see it have a successful IPO, even in the current climate. One concern is that, of 400 million users, only about 3-4 million are active at any one time.
Estimated Valuation: $40 billion
Two years ago, you might have said that Fanatics was an e-commerce company focused on official sports merchandise. Now, with its ventures in e-sports and sports gambling, its CEO Mike Rubin has already taken to calling the firm a ‘digital sports platform’, telling a March 2022 conference: “I’m 100% locked into making Fanatics the most incredible digital sports platform in the world.”
How do you measure the success of a digital sports platform? Well, looking at its investors is a good start. In 2022, Fanatics’ investors include the NFL, MLB, NBA, NHL, MLS, and a host of players’ unions, with a combined investment of over $5 billion. Little wonder then, that the aim is to make the company a $100 billion sports behemoth. We have estimated a conservative $40 billion valuation for the IPO listing on this basis.
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