5 IPOs to Watch For in 2013

by Tom Taulli | December 19, 2012 10:35 am

[1]The U.S. IPO market may not have sizzled in 2012, but it was still much better than new offerings in the rest of the world. The total amount raised globally came to about $47.1 billion[2], of which Facebook (NASDAQ:FB[3]) accounted for $16 billion. But that was still more than the $14 billion raised for all IPOs combined in China, which is the No. 2 player.

Going into 2013, it looks like the U.S. IPO market may get stronger. Resolving the fiscal cliff will be a major factor. Other trends could include the housing market rebound and continued growth in mega-tech categories like cloud computing and mobile.

So, what IPOs might we see in 2013? Let’s take a look:

1. Gilt: Founded in 2007, the company is an online platform for “flash” sales, with a focus on luxury products. Gilt was an instant hit and has gone on to grow at a torrid rate. For this year, revenues are expected to reach over $600 million[4], up 50% over the past past 12 months. In fact, the company is even cash flow positive.

To prep for an IPO, Gilt recently hired a new CEO, Michelle Peluso, a former executive at Citigroup (NYSE:C[5]) and CEO of Travelocity.

However, a deal would certainly have some pushback after a string of lousy e-commerce IPOs like Groupon (NASDAQ:GRPN[6]) and CafePress (NASDAQ:PRSS)[7].

Despite this, one recent deal does bode well for Gilt: Vipshop (NYSE:VIPS[8]), which is a top flash site in China. Since coming public in March, its shares are up 162%.

2. Box: The company operates a cloud-based platform that allows for collaboration, such as on projects. Box is essentially targeting Microsoft’s (NASDAQ:MSFT[9]) SharePoint franchise.

Back in July, Box announced that its enterprise sales rose by 200% over the past year[10] (the dollar amount wasn’t disclosed). Some of its customers include biggies like Proctor & Gamble (NYSE:PG[11]), Intel’s (NASDAQ:INTC[12]) McAfee and AAA.

Of course, Box must contend with tough competitors, such as Dropbox and YouSendIt. Consider that Google (NASDAQ:GOOG[13]) also recently entered the market with its GDrive.

Yet IPO investors still have a healthy appetite for fast-growing cloud operators. Just some of 2012’s standouts include Workday (NYSE:WDAY[14]) and ServiceNow (NYSE:NOW[15]).

3. Airbnb: The company created a new marketplace that allows people to rent out their homes and apartments for short stays. The business model is simple but powerful. That is, Airbnb takes a 10% cut of each transaction.

No doubt, Airbnb’s business is massive. Consider that the company is expected to book more rooms than Hilton for 2012[16]! Privco believes Airbnb’s revenues will reach about $180 million for 2012[17].

Right now, Airbnb is raising a round of financing, which will be about $100 million at a valuation of $2 billion to $3 billion[18]. Peter Thiel, who was the first outside investor in Facebook, is rumored to be interested in leading the deal.

4.  SugarCRM: The company develops customer relationship management (CRM) software that competes against Salesforce.com (NYSE:CRM[19]). But SugarCRM has a different business model — known as the freemium approach. This means users can get a workable free version of SugarCRM and then convert to a premium offering, which has more features and support.

The company has gotten lots of traction. In Q3, revenues increased by 45%[20]. SugarCRM has over 6,000 paying customers, including Men’s Wearhouse (NYSE:MW[21]) and Coca-Cola (NYSE:KO[22]).

CEO Larry Augustin is a veteran of the IPO game. Back in 1999, he took VA Linux public, and it soared about 700% on its first day of trading[23]. Unfortunately, the company quickly lost much of its value when the dot-com boom fizzled.

5.  Zendesk: The company got its start back in 2007 with the launch of a cloud-based help desk system. But this isn’t a hot Silicon Valley start-up. Instead, Zendesk was founded in Copenhagen, Denmark.

But its location has not hindered Zendesk’s success. As of now, it has over 20,000 customers, including marquee names like Disney (NYSE:DIS[24]), Adobe (NASDAQ:ADBE[25]) and Sony Music (NYSE:SNE[26]).

According to a report in PEHub.com[27], Zendesk is forecasted to hit $30 million in revenues in 2012 and $70 million for the following year.

Tom Taulli runs the InvestorPlace blog IPO Playbook[28], a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook[29]” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders[30].”  Follow him on Twitter at @ttaulli[31]. As of this writing, he did not hold a position in any of the aforementioned securities.

  1. [Image]: http://investorplace.com/hot-topics/best-of-2012-and-2013/
  2. $47.1 billion: http://online.wsj.com/article/SB10001424127887323297104578179851096009998.html?KEYWORDS=ipo
  3. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  4. over $600 million: http://techcrunch.com/2012/12/09/five-years-in-and-profitable-gilt-refocuses-on-new-leadership-an-ipo-in-2013-and-more/
  5. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  6. GRPN: http://studio-5.financialcontent.com/investplace/quote?Symbol=GRPN
  7. PRSS): http://studio-5.financialcontent.com/investplace/quote?Symbol=PRSS
  8. VIPS: http://studio-5.financialcontent.com/investplace/quote?Symbol=VIPS
  9. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  10. 200% over the past year: http://www.marketwire.com/press-release/box-announces-125-million-investment-to-fuel-enterprise-growth-1685556.htm
  11. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  12. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  13. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  14. WDAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=WDAY
  15. NOW: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOW
  16. book more rooms than Hilton for 2012: http://techcrunch.com/2012/12/12/cloudera-ceo-mike-olson-by-december-31st-airbnb-will-be-filling-more-room-nights-than-hilton-hotels/
  17. $180 million for 2012: http://www.forbes.com/sites/calebmelby/2012/10/19/peter-thiel-may-invest-150-million-in-airbnb-at-2-5-billion-valuation/
  18. $100 million at a valuation of $2 billion to $3 billion: http://techcrunch.com/2012/09/26/airbnb-is-raising-a-big-third-round-aiming-for-a-valuation-north-of-2b/
  19. CRM: http://studio-5.financialcontent.com/investplace/quote?Symbol=CRM
  20. increased by 45%: http://www.sugarcrm.com/newspress/sugarcrm-continues-see-global-expansion-and-traction-enterprise-market-q3-2012
  21. MW: http://studio-5.financialcontent.com/investplace/quote?Symbol=MW
  22. KO: http://studio-5.financialcontent.com/investplace/quote?Symbol=KO
  23. soared about 700% on its first day of trading: http://www.businessweek.com/news/2012-11-02/salesforce-dot-com-competitor-sugarcrm-weighs-ipo-for-2013
  24. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  25. ADBE: http://studio-5.financialcontent.com/investplace/quote?Symbol=ADBE
  26. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  27. PEHub.com: http://www.pehub.com/174947/zendesk-ready-2013-ipo-sources/
  28. IPO Playbook: http://investorplace.com/ipo-playbook/
  29. How to Create the Next Facebook: http://www.amazon.com/gp/product/1430246472/ref=s9_simh_gw_p14_d0_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-3&pf_rd_r=0GRB6ZMCTYDZVNG7Q7NV&pf_rd_t=101&pf_rd_p=470938811&pf_rd_i=507846
  30. High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders: http://goo.gl/pR2F3
  31. @ttaulli: https://twitter.com/ttaulli

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