“7 Upcoming IPOs for the Second Half of 2020” was originally published on July 27, 2020. It has since been updated with more timely and relevant information.
For upcoming IPOs, we will see a flood of them in the next few months. We will also see quite a few high-profile deals hit the markets.
Of course, with interest rates at historically low levels and the equities markets in the bull mode, the conditions are ideal for new offerings. To get a sense of things, consider that the Renaissance IPO ETF (NYSEARCA:IPO) is at an all-time high. Since March, the shares have gone from $22 to $50.
As should be no surprise, much of the action has been with technology and biotech operators. These are the kinds of companies that have seen an acceleration in growth.
There has also been a sharp rise in the issuances for special purpose acquisition companies (SPACs), which are publicly traded shells. These vehicles allow for operating companies to become public much quicker and less expensively through a merger. This has certainly been important because of the impact of the novel coronavirus, which has made dealmaking more complicated.
So in light of all this, what are some of the notable companies looking to come public soon? Let’s take a look at seven upcoming IPOs:
- Palantir Technologies
- Sumo Logic
- Unity Software
Upcoming IPOs: Asana
Dustin Moskovitz, the co-founder of Facebook (NASDAQ:FB), could have retired years ago. But after he left the social network, he wanted to start another venture: Asana. This happened in 2008.
The inspiration for this actually came when Moskovitz saw how an internal work management tool gained wide adoption at Facebook. The system was much easier than dealing with the endless emails, chats and spreadsheets of a typical corporate environment.
Fast forward to today: Asana has more than 1.2 million paid users. And as for the growth, it has been strong. From fiscal 2019 to 2020, revenues went from $76.8 million to $142.6 million.
In terms of the IPO, the company plans on having a direct listing. This means that the company will not receive any proceeds from the offering. Note that the Asana IPO will be the first direct listing since Slack Technologies (NYSE:WORK) came public last year.
Among the upcoming IPOs, Snowflake is somewhat unique. Since the late 1980s, this will only be the second database company to come public. The last one was MongoDB (NASDAQ:MDB), which hit the markets in October 2017. The shares went from $24 to $237, with the market capitalization at just over $12 billion.
As for Snowflake, the company operates a native cloud data warehouse. The technology — which separates computing from storage — allows for much higher performance at a lower cost. In fact, the company’s standout platform has been able to stay ahead of a various tough rivals like Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
From fiscal 2019 to 2020, revenues spiked from $96.7 million to $264.7 million — making Snowflake one of the world’s fastest-growing cloud companies. There are over 3,100 customers, and 56 generate more than $1 million annually.
Upcoming IPOs: JFrog
JFrog operates a DevOps — a combination of software development and IT operations — platform that helps with providing continuous software release management, or CSRM. The technology essentially allows for faster development and release of software.
With the trend toward digital transformation, these solutions are in high demand.
Last year, revenues came to $104.7 million, up from $63.5 million. During this period, the net loss plunged from $26 million to $5.4 million. The company has also remained cash flow positive and there is $170 million in the bank.
JFrog has about 5,800 customers, which include three-quarters of the Fortune 100. The net retention rate is also 139%, which indicates strong adoption with the install base.
For the upcoming IPO, the company plans to list on the Nasdaq Exchange under the ticker of FROG. Lead underwriters include Morgan Stanley, JPMorgan and Bank of America (NYSE:BAC).
Since 2003, Palantir Technologies has been developing software systems for large institutions, especially governments. The focus has been on areas like counterterrorism, warfare and fraud investigations. One rumor is that the technology led to the capture of Osama bin Laden.
The company has deep Silicon Valley roots. Consider that Peter Thiel is one of the co-founders. He is the original investor in Facebook and co-founder of PayPal (NASDAQ:PYPL).
But interesting enough, Palantir CEO Alex Karp wrote a stinging shareholder letter in the S-1 filing about the issues with Silicon Valley. He has even recently relocated the headquarters to Denver, Colorado.
The first half of this year has seen a spike in revenues for Palantir, up 49% to $481 million. Last year’s growth rate was 25%. A big part of the acceleration has been due to an significant expansion of the sales organization.
Like Asana, Palantir’s IPO will be a direct listing. The shares will trade on the NYSE under the symbol of PLTR.
Upcoming IPOs: Sumo Logic
Sumo Logic operates a cloud platform for continuous intelligence, also known as CI. This means that the technology helps with the collection and analysis of different types of data, such as from applications, internet of things (IOT) and security systems.
A key part of this is the use of artificial intelligence and machine learning. The system also scans an average of 873 petabytes of data every day and handles 18.6 billion events per second .
For the latest fiscal year, revenues grew by 50% to $155 million. The customer count is over 2,100 and the dollar-based retention rate is over 120%.
For the upcoming IPO, the company plans to list on the Nasdaq Exchange under the ticker of SUMO. Lead underwriters include Morgan Stanley, JPMorgan, RBC Capital Markets and Jefferies (NYSE:JEF).
GoodRx is an app that helps consumers get information and discounts on medications. It also provides access to telemedicine services. The co-founders of the company started GoodRx because of their personal experience with the complexities, costs and lack of transparency of the U.S. healthcare system.
Something that is quite different for this tech startup is that the company has been profitable!
For example, during the first half of this year the net income came to $55 million, up from $31 million for the same period a year ago. Revenues also went from $173 million to $257 million. The company’s business model involves generating fees primarily from pharmacy benefits managers (PBMs).
Since inception, GoodRx has saved consumers about $20 billion. There are 15 million people who use the app every month.
For the upcoming IPO, the company expects to list on the Nasdaq under the ticker GDRX. Lead underwriters include Morgan Stanley, JPMorgan, Barclays and BofA Securities.
Upcoming IPOs: Unity Software
Founded in 2004, Unity Software is the leading developer of software to help create real-time 3D video games. There are two parts to the platform. First, there is Create Solutions, which developers, artists, designers, engineers and architects use to develop content. Next, there is Operate Solutions. This allows customers to grow the user base and monetize the games. Unity Software also makes it possible to deploy across more than 20 gaming platforms, such as Windows, Mac, Android Play, Xbox, PlayStation, iOS and so on.
From 2018 to 2019, revenues jumped from $380.8 million to $541.8 million. About 1.5 million creators use the software.
As for the IPO, the company plans to list on the NYSE under the symbol of U. Lead underwriters include Goldman Sachs, Credit Suisse (NYSE:CS) and BofA Securities.
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 an advisor/board member for startups and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.