Initial Public Offerings (IPO) may have had a rough year in 2019, but that is not stopping experts from calling for another strong IPO market in 2020, especially for the first part of the year. 2019's market fizzled notably from the dramatic fall of WeWork, thus sullying investor confidence towards "unicorns," or companies that were valued at over $1 billion before going public. The uneven performance from unicorn IPOs lead to some delaying their public offering for a later date when investors are more welcoming.
What is being dubbed the "WeWork effect" by Phil Haslett, chief revenue officer at EquityZen, Haslett predicts that investors in 2020 will focus more "on profitability, less on outright revenue growth, and more [have] more focus on corporate governance." Investors are also expected to draw a greater distinction between real tech companies and ones that are only enabled by tech like Uber (NYSE: UBER), Peloton (NASDAQ: PTON), and SmileDirectClub (NASDAQ: SDC); All three are major 2019 IPOs that have had rocky performances since their debut. Some may even choose to directly list, like Slack (NYSE: WORK) and Spotify (NYSE: SPOT).
Here are some predicted 2020 IPOs:
Airbnb: Much anticipated for 2019, Airbnb had delayed its IPO mainly due to the fall of WeWork. The company itself has had some past scandals and has used 2019 to correct many of its failures. The online home-sharing marketplace is still a large competitor to hotel companies and may very well enter public markets in 2020. The company has been valued recently at upwards of $35 billion.
Ant Financial: The financial technology affiliate company of Chinese e-commerce powerhouse Alibaba (NYSE: BABA) may very well begin public trading in 2020. The company runs the most popular mobile payment service in China, Alipay, as well as operating an investment fund and an online bank that offers other financial services. Though the company has very loose IPO plans, Ant Financial targets two billion users and has a reported valuation of $150 billion.
Instacart: The popular grocery deliver company is set to debut in 2020 due to its raising of over $1.2 billion in private equity markets and valuation being close to $8 billion. Though the companies revenue and profitability are not publicly disclosed, that company seem to be growing and has had various partnerships with companies like Kroger (NYSE: KR) and Walmart (NYSE: WMT). This IPO will however face competition from retail giants like Target (NYSE: TGT) and Amazon (NASDAQ: AMZN) who are also in the food delivery business.
Stripe: The fintech payment company has a strong chance of entering public trading markets in 2020. Stripe makes software that allows business to accept payments over the internet and is notably used to process payments from companies like Airbnb, Lyft (NASDAQ: LYFT), and Shopify (NYSE: SHOP). The company has a valuation of $35 billion.
SoFi: The financial services provider that is focused on younger generations has a private valuation above $4 billion, making it a big contender for public trading. Due to the rocky IPO climate for "unicorns," the company is focused on the quality of its business before proposing a public offering.
Postmates: The on-demand delivery services company that rivals GrubHub (NYSE: GRUB) delayed its IPO after the market's reactions to Slack, Lyft and Uber, but that may not stop them from entering markets in 2020. The company has a large valuation of $2 billion.