2022 was a turbulent economic year that resulted in a major slump in Initial Public Offerings. Global IPO volumes fell by 45% following increased market volatility, high inflation, and rising interest rates.
The IPO market is expected to recover sometime this year with a number of highly-anticipated IPOs. Those include major names from the Technology, Blockchain, and Neo-banking industries such as Revolut, Monzo, Kraken, Arm Holdings, Klarna, Starling Bank, Databricks, and more.
Of course, the current turmoil in the global banking system could delay further some of these Initial Public Offerings, as some companies might choose to wait out the financial effect on the stock market.
As soon as the prices from the exchange become available to our liquidity providers you can trade the following IPOs with Axi.
Once described as ‘the jewel in the crown of British technology’, Arm Holdings was bought by Japan’s internet firm Soft Bank in 2016 in a $32 billion deal. Arm Holdings specialises in chip architecture, meaning that they don’t simply manufacture microchips, they also design them. According to their website, about 70% of the world population uses Arm-based technology across all markets. This means that almost every internet user is exposed daily to a product built with Arm technology, including cars, smartphones, drones, and even electronic passports. With Arm having a ‘near monopoly’ over parts of the market, the listing could be one of the hottest IPOs in 2023.
Founded in 2013, Databricks is a cloud-based platform that unifies and simplifies data systems, for better organization and collaboration within companies. Its software is used by both large enterprises and smaller businesses including several well-known companies such as Apple, Disney, HSBC, Shell, Condé Nast, and Atlassian. Databricks is expected to be one of the most high-profile IPOs in 2023. The valuation could potentially exceed $40 billion.
Revolut offers a variety of financial services such as multi-currency bank accounts, debit cards, currency exchange, stock trading, and cryptocurrency investing. With Europe getting saturated with neo-banks, Revolut is already working hard to expand into the United States, as well as Brazil, Mexico, and India. The firm recently announced it has surpassed 25 million users worldwide. Its recent 33 billion valuation makes Revolut the UK´s biggest fintech company, competing with many well-established names in the financial industry.
Founded in 2015, Monzo is a UK-based neo-bank. Despite only being eight years old, Monzo has experienced rapid growth, boasting 5.8 million customers. Monzo´s banking services are accessed by clients through its mobile app, and only limited features are available on the web browser version. Being an online bank, the company does not have any branches. The UK is Monzo´s main market and the company is competing primarily with Revolut and Starling. Monzo has been lagging behind its competitors when it comes to growth, and so far, has failed to expand to other markets as aggressively as Revolut did. An IPO could help change that.
Founded in 2011, Kraken is one of the oldest Bitcoin exchanges in the world and the third biggest crypto exchange by trading volume. The San Francisco-based company currently offers 185+ cryptocurrency pairs for leveraged trading. According to its website, Kraken’s mission is to accelerate the adoption of cryptocurrency so that the world can achieve financial freedom and inclusion. During the surge in crypto prices in February 2021, Kraken witnessed an increase of over 1000% in signups. It then sought a valuation of $10 billion, which more than doubled its worth.
Founded in Sweden in 2005, Klarna is a fintech company that provides online financial services. Klarna offers “buy now, pay later” payment options for online retailers and physical stores. This enables buyers to split their payments over four equal interest-free installments, which have to be paid every two weeks. Klarna´s valuation recently took a major hit. While valued at $31 billion in March 2021, it saw its valuation drop to only $6.7 billion in July 2022. Klarna’s popularity amongst consumers and strong position in key markets could help the company recover quickly though, and interest in its IPO could bounce back just as fast.
Founded in 2014, by British female entrepreneur Anne Boden, Starling is considered a rare British “unicorn” in the fintech industry. Starling has no physical branches but is a platform that is accessed primarily via its mobile app and the company’s website. It makes money via subscriptions, interest payments, interchange fees, and other fees such as transfers, overdrafts, referrals, and licensing. The digital bank gas opened more than two million accounts, since launching, including more than 300,000 small business accounts.
Reddit filed to go public in 2021, aiming for a valuation of $15 billion dollars at that time. During that year, the coronavirus pandemic reached its peak, creating a nation of “armchair traders”. As a result, interest in online forums such as Reddit skyrocketed. Reddit’s investing forum WallStreetBets became the platform driving the meme stock market frenzy that included relatively obscure stocks such as GameStop and AMC. In August 2021 Reddit was valued at $10 billion in a private fundraising round.
Instacart is a US-based company that specializes in grocery delivery and pick-up services. It operates in the United States and Canada and has more than 3000 employees. Its headquarters is located in San Francisco. Instacart receives a commission for each product that is sold through their platform - meaning the retailer who sold it has to pay a percentage of the price to Instacart. Instacart has recently cut its internal valuation to $10 billion. This is almost 75% lower than its early 2021 valuation of $39 billion.
Airline Virgin Atlantic is expected to finally make a profit in 2023 after it almost collapsed in 2020 during the Covid global travel bans. In 2021, Virgin Atlantic reported total revenue of £928 million, up £60m in 2020, yet down from £2.9 billion in 2019. A Virgin Atlantic IPO would be a historic moment, that will see founder Richard Branson surrender his position as 51% shareholder.
Home development and design platform Houzz was founded in 2009 by married couple Adi Tatarko and Alon Cohen. The Houzz online platform makes money via subscriptions, referrals, foreign exchange, and late payment fees, as well as interest. Investors have been waiting for some years for Houzz to launch an Initial Public Offering. The company has landed a $4 billion valuation.
Independent beer maker BrewDog has been waiting for markets to recover before listing for an Initial Public Offering. BrewDog was founded in 2007 in a small town in northeast Scotland and became a multi-national empire that includes breweries, around 90 bars worldwide, and even beer hotels with franchise partners. It has more than 100 sites in 15 countries. Despite the pandemic, BrewDog reported strong sales in the UK, with revenues up 21% in 2021, to £286 million. An IPO would help the company strengthen its investor base and raise its public image.
Real-time chat platform Discord could go public is one of the most widely anticipated IPOs on Wall Street. A listing is likely to occur on the New York Stock Exchange (NYSE) or NASDAQ, and the most recent fundraising round in August 2021 put Discord´s value at $15 billion. The current market environment is particularly tough for technology companies, as the U.S. Central Bank keeps raising interest rates, making it more difficult for companies lacking an established track record to raise money. Nevertheless, a 2023 IPO is still possible as the interest in Discord has not diminished.
Trading an IPO is a process similar to trading any other asset. With Axi you can get exposure to IPO shares as soon as a company is listed on a specific exchange and prices from the exchange become available to our liquidity providers.
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The data is sourced from third-party providers. This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. Axi makes no representation and assumes no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.
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