Kicking Off 2022’s IPO Market: 3 Listings to Watch Out for This Year

The record-breaking IPO market of 2021 may be a tough act to follow, but with a series of blockbuster initial public offerings set to arrive in the coming months, we may see a strong follow-up in 2022. 

The IPO market became red-hot in the wake of the Covid-19 pandemic as a rapid acceleration towards digital transformation and the arrival of government stimulus packages gave rise to exciting new tech companies alongside a greater volume of investors ready to buy their favorite stocks. 

(Image: PwC)

As we can see, IPO volume, buoyed by SPACs, accelerated to unprecedented levels in the wake of the Covid-19 pandemic, with as many as 298 deals taking place in Q1 of 2021 alone. 

However, 2022’s IPOs market had gotten off to a volatile start. The first three listings of the year, all pharmaceutical companies, have paved the way for cautious optimism for the months ahead, with all firms appreciating in value following a period of volatility. 

Amylyx Pharmaceuticals, Vigil Neuroscience, and CinCor Pharma were all tentatively listed in early January but all have ended the month up from their debut values. 

Their listings come amidst forecasts anticipating that the IPO market will endure a slowdown following record-breaking inflation rates and mass stock sell-offs from investors. 

However, the health of 2022’s IPO market may depend on the repertoire of startups looking to debut in the early stages of the year, and with no shortage of big names readying themselves to go public, we could yet be in for a blockbuster 2022. Let’s explore three of the most exciting listings to keep in mind for the months ahead:

1. Stripe

There’s little doubting that Stripe will be the most anticipated IPO of 2022. In March 2021, the financial services firm embarked on a $600 million Series H fundraising round that raised the company’s valuation to $95 billion. In 2020, Stripe was recording revenues of around $7.4 billion. 

When Stripe first opened up operations, the company serviced other startups that had been largely ignored by more traditional financial institutions, helping firms like DoorDash in the process. As these unloved startups grew, Stripe scaled alongside them - enabling what may have been seen as a risky business strategy to pay off. 

Stripe steadily built a financial empire, offering money-spinning services to companies across the globe. Today, Stripe has grown to incorporate the likes of Amazon among its growing repertoire of prestigious firms. 

Furthermore, the pandemic has helped to turn Stripe into a household name, and the company’s inroads into artificial intelligence investments have enabled the company to take on new business as it grows into an exciting prospect for future growth.

2. Discord

Originally an essential platform for many gamers all around the world, the vast potential functionality of Discord has turned the instant messaging and digital distribution platform into a tantalizing prospect for investors ahead of an anticipated 2022 IPO. 

“Discord is one of the most popular applications for communication among gamers (the user base has over 150 million active accounts per month worldwide). Users can communicate in real-time through voice calls, video calls, screen streaming, file sharing, server creation and more,” explained Maxim Manturov, head of investment advice at Freedom Finance Europe. 

“In 2021, the company was in talks with Microsoft to acquire it for $10 billion, but the deal fell through. In September 2021, the company raised $500m and received a valuation of $15bn. 

Overall, the company may be interesting to the market, but we will have to wait for an official bid from the company and its financials to fully evaluate its potential,” Manturov added.

Discord is a platform with bags of potential. Although the platform is heavily used by gamers, the servers are also becoming more frequently used for other talking points surrounding investment strategies and various other talking points across the web. With talk of the metaverse intensifying in recent months, it’s clear that Discord can be well-positioned to adapt its platform for secure VR collaborative spaces.

3. Instacart

Finally, Instacart stands as one of the most popular digital grocery delivery and pick-up services in North America. The startup is built on an intricate logistics system that involves agreements with over 400 retailers across more than 30,000 stores. 

Instacart’s unrivalled network is available to approximately 85% of US households as well as 80% in Canada. The services can be accessed digitally from just about any internet-enabled device via a browser to dedicated mobile app. Delivery times for customers currently fall within two hours, making the platform a leader in terms of convenience. 

Significantly, early 2021 saw Instacart’s valuation double to $39 billion - however, its current rate of growth makes a market cap of up to $50 billion possible. With the company’s IPO expected to occur in early 2022, a successful Instacard floatation could act as a catalyst for more listings among digital services. 

Although forecasts suggest a muted 2022 IPO market in comparison to the freewheeling listing landscape across late 2020 and early 2021, the arrival of some big hitters in the fintech, digital collaboration, and online delivery industries generate enough optimism for other firms to follow suit. With this in mind, the successful listings of Stripe, Discord, and Instacart may not only be fruitful to investors, but for the IPO space as a whole.