This past year the initial public offering (IPO) market ended on a very bullish note. Several high-profile offerings hit the markets, including Airbnb (NASDAQ:ABNB) and DoorDash (NYSE:DASH). So, what about potential IPOs in 2021?
Well, there are already a variety of companies that have filed to go public, including Roblox and Coinbase. And yes, these IPOs will likely do quite well. But they’re only a small portion of the companies we’ll see pull off deals this year.
The fact is that there are many unicorns out there — companies with valuations in excess of $1 billion. The investors in these companies also realize that the IPO window could easily close, especially if the markets lose steam. Because of this, there will be lots of urgency to get deals done this year.
So, what are some of the potential IPOs for 2021? Here are seven:
Apache Spark is an open-source project that helps manage Big Data. The original developers were students at Berkeley and they went on to launch Databricks, the first company on my list of potential IPOs in 2021. The idea was to build a sophisticated web-based analytics platform on Spark.
And of course, Big Data IPOs have done extremely well recently. Just look at the standout performance of Snowflake (NYSE:SNOW), for instance.
In terms of funding, Databricks received its the latest round of capital in October 2019, when the company raised $400 million at a valuation of $6.2 billion. So, there’s some significant confidence surrounding this name. Andreessen Horowitz was even a lead investor.
Like many great companies, Squarespace started from a dorm room. The founder, Anthony Casalena, was a programmer at the University of Maryland and created a blog hosting service. Just on his own, he was able to get the business to significant revenues in a couple years.
However, Casalena knew he had to scale the operation. So, he raised capital and ramped up hiring. Casalena also added web design tools, e-commerce, domain name management and analytics to the platform.
The most recent funding for the company was in late 2017. Squarespace raised $200 million at a $1.7 billion valuation. The lead investor was General Atlantic.
According to a report from Bloomberg, it also looks like Squarespace is one of the best potential IPOs in 2021. Its deal will likely be red hot, set for the first half of the year. After all, other web-hosting companies like Wix.com (NASDAQ:WIX) and Shopify (NYSE:SHOP) have been big winners on Wall Street.
While artificial intelligence (AI) and machine learning (ML) are powerful tools, they are complicated. The reality is that many companies do not have the technical talent to manage that kind of data and create models.
So, what can they do? Well, there are so-called AutoML tools to help out in that situation and one of the leaders in the space is DataRobot. The company has built an end-to-end system that makes it much easier to build, deploy and manage analytics systems and applications at scale. In fact, the platform processes 2.5 million models per day.
As should be no surprise, DataRobot has had little trouble raising capital as one of the potential IPOs in 2021. Its latest round of funding was last month, when the company brought in $320 million at a valuation of $2.8 billion. Investors included companies like HP (NYSE:HPE) and Snowflake. Moreover, the company announced it had made a partnership with Snowflake. That will help accelerate growth.
DataRobot called the deal “pre-IPO funding.” In other words, it’s a pretty good bet that the firm will be launching its public offering soon.
Next on my list of potential IPOs in 2021 is Gitlab, a company that operates an open-source platform and helps developers manage their projects. Currently, more than 100,000 organizations use the platform and its registered users top 30 million. Gitlab also has over 3,000 contributors and a completely remote staff of nearly 1,300 team members.
Finally, according to a report by CNBC, Gitlab recently allowed some of its employees to sell their stock at a valuation of over $6 billion. So, there’s clearly some real potential here. For comparison, Gitlab is similar to Github, which was sold for $7.5 billion to Microsoft (NASDAQ:MSFT) in 2018.
Coursera did not start as a business. Rather, it was a platform created by professors Daphne Koller and Andrew Ng in order to make college courses available online to anyone. However, as the traffic grew, both Koller and Ng realized that they would need funding to scale the operation. In 2012, they raised $16 million from Kleiner Perkins Caufield & Byers.
Since then, Coursera’s growth has continued to be robust and there have been various other rounds of capital infusions. The last one was in July, when Coursera raked in $130 million at a valuation of $2.5 billion.
The company currently offers plenty of courses from universities like Stanford and Duke as well as corporate educational programs with companies like IBM (NYSE:IBM) and Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG). More than anything, the company is focused on curriculum that helps its students get quality jobs.
The programs are also relatively affordable. For example, its online master’s and bachelor’s degree programs have fees that range from $15,000 to $25,000, which can be supplemented with financial aid.
Regarding an IPO, it looks like Coursera will have an offering this year at a valuation of over $5 billion. That makes it one of the best potential IPOs in 2021.
Next on this list of potential IPOs in 2021 is Turo, a peer-to-peer car sharing marketplace. With Turo, you can select from over 850 makes and models of cars to drive for a fixed period of time — from one day to a month. The fees start at $25 per day.
Turo’s service is available in more than 5,500 cities in the United States, Canada and the United Kingdom. More specifically, there are over 14 million members using the platform.
Currently, the company has raised $500 million in all, with investors including Manhattan Venture Partners and Allen & Co. Even celebrities and athletes have invested in the company, with “shareholders that include NFL player Larry Fitzgerald and rapper 2 Chainz.”
For 2020, the company is on pace to reach $153 million in revenues and has already hit profitability. Because of Covid-19, the company also has significantly reduced its costs. Turo plans to go public sometime this year.
Monday.com, the last entry on this list of potential IPOs in 2021, has origins going back to 2010. The basis for the company was first developed when Roy Man and Eran Zinman, two Wix.com employees, helped build a project management tool. At the time, the software was greatly needed because Wix was going at breakneck speed.
But Man and Zinman soon realized their software could be useful for many companies. So, they launched Monday.com. Since then, the company has grown quickly. Right now, there are over 115,000 organizations using the platform.
What’s more, the company saw a spike in revenues for 2020 due to the pandemic. That’s because many companies had to find ways to manage remote workforces.
As for an IPO, Monday.com is expected to go public in the first half of the year at a valuation between $3.5 billion and $4 billion. Prospective investors should also keep in mind that one of the company’s rivals – Asana (NYSE:ASAN) — had its IPO back in September. Currently, ASAN is doing well, with shares up about 18%.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.