As the economy opens up in the U.S., the IPO market has been staging a comeback. It certainly helps that the equities have been in bull mode. Although, for the upcoming IPOs in the next month or so, the volume may still be somewhat light.
So what have been some of the best IPOs so far? Since May, the top-performing offering was from Gan (NASDAQ:GAN), up about 160%. The company operates a cloud-based service for online casino gaming and sports betting. With the impact of the novel coronavirus, there has been a strong uptick in demand in the U.S. as casinos, racetracks, and sportsbooks look to go digital.
What about the best IPOs that will hit the markets, say, within the next month or so? Let’s take a look at five:
- Dun & Bradstreet
- Fathom Holdings
- DoubleDown Interactive
Upcoming IPOs to Watch: Accolade (ACCD)
The first on this list of upcoming IPOs is Accolade. Accolade operates a platform that helps employees understand their health benefits. This is on a cloud-based system, which processes huge amounts of data using AI (Artificial Intelligence). There is also a sophisticated CRM (Customer Relationship Management) system.
Yet Accolade is not a pure tech play. Keep in mind that there is a team of health assistants who are trained to answer complex questions, but also clinicians like registered nurses, physician medical directors, pharmacists, behavioral health specialists, and women’s health specialists. They can help select providers, prepare for visits, identify prescription conflicts, and coordinate with providers.
Accolade has 57 customers, which are large enterprises. The aggregate number of members covered is about 1.6 million and the revenues are based on a recurring per-member-per-month fee. This definitely helps to provide stability and visibility.
For fiscal years 2018 to 2020, revenues went from $76.8 million to $132.5 billion. But the company has continued to post losses. In 2020, they came to $51.4 million.
Regarding the upcoming IPO, the ticker symbol is ACCD and the lead underwriters include Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), BofA Securities (NYSE:BAC), Piper Sandler, Credit Suisse (NYSE:CS) and SVB Leerink.
Dun & Bradstreet (DNB)
Dun & Bradstreet, which is a large information services provider, went private in February 2019 for $6.9 billion. The private equity sponsors included CC Capital Partners, Cannae Holdings, and Black Knight Inc.
But yes, the company will soon come public. All in all, it’s a clear sign that Wall Street thinks the IPO market is heating up again.
Dun & Bradstreet, whose roots go back 177 years, has a rich database of more than 360 million businesses. In fact, the D-U-N-S Number has become similar to an identifier like a person’s Social Security Number. The database has a wide-array of use cases, such as for risk management, financial transaction, compliance and procurement.
However, during the past few years, revenues have been sluggish, as the company has gone through a restructuring. But the bottom-line remains strong. There are also about 135,000 customers, which include 90% of the Fortune 500.
For the upcoming IPO, the proposed ticker is DNB and the lead underwriters include Goldman Sachs, BofA Securities, J.P. Morgan (NYSE:JPM), and Barclays (NYSE:BCS). Note that the buzz is that the company could raise over $1 billion in the offering.
Lemonade is a mobile app for property and casualty insurance. It leverages AI to provide for a more personalized experience. At the heart of this is a bot called AI Maya. With this, coverage only involves a two-minute chat.
Oh, and then there is AI Jim. He is the bot that helps pay claims, which can happen in as little as three seconds.
The company’s innovative approach has resulted in strong growth. From 2016 to 2019, the gross written premiums grew from $9 million to $116 million. During this period, there has also been a decline in net losses per dollar, going from more than $3 to under $1.
Note that the business model is different from the traditional approach. Lemonade takes a fixed fee, which is about 25% of the premiums.
Regarding the upcoming IPO, the ticker is expected to be LMND and the lead underwriters include Goldman Sachs, Morgan Stanley, Allen & Company and Barclays.
Fathom Holdings (FTHM)
Founded in 2010, Fathom Holdings is a cloud-based real estate brokerage operation. By having a low-cost infrastructure, the company has been able to pay its agents higher commissions. But there are other benefits, including equity participation and affordable healthcare insurance.
The underlying technology platform is called IntelliAgent, which allows for end-to-end management of the brokerage. Each agent also gets a personalized website that is optimized for mobile platform. There is also access to a CRM and marketing system.
Last year, revenues jumped from $77.3 million to $109.6 million. The losses were also modest, coming to $4 million in 2019.
For the upcoming IPO, the proposed ticker is FTHM and the lead underwriter is Roth Capital.
DoubleDown Interactive (DDI)
Based in South Korea, DoubleDown Interactive is a developer and publisher of mobile and web-based casual games. It’s main franchise is DoubleDown Casino, which has been on the list of top 20 grossing games on Apple’s (NASDAQ:AAPL) app store since 2015.
Among the other games, they have DoubleDown Fort Knox, DoubleDown Classic, and Ellen’s Road to Riches. Although, DoubleDown Fort Knox has gotten the most traction. During the past year, there have been over three million installations.
DoubleDown is the pioneer of social casino gaming, with the initial focus on Facebook (NASDAQ:FB). But when this market dried up, the company was able to successfully adapt.
Note that about 87% of revenues come from the U.S. market (the total for 2019 was $273.6 million, up from $266.9 million in 2018). The company is also profitable, with net income of $36.6 million last year.
For the upcoming IPO, proposed ticker is DDI and the lead underwriters include J.P. Morgan and BofA Securities.
Tom Taulli (@ttaulli) is an advisor 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. As of this writing, he did not hold a position in any of the aforementioned securities.