Many of the IPOs expected in the last weeks of the year look quite interesting. We’ll see some of the most eagerly-awaited unicorns hit the markets, such as Airbnb, DoorDash and Affirm.
Besides a few months in the immediate wake of the novel coronavirus pandemic hitting the U.S., the IPO market has been quite robust this year. This has especially been the case for next-generation technology and biotechnology companies.
Keep in mind that year-to-date, the Renaissance IPO ETF (NYSEARCA:IPO) has seen its stock price go from $31 to $57. Then again, the fund’s portfolio counts among its holdings red-hot names such as Pinterest (NYSE:PINS), Zoom Video Technologies (NASDAQ:ZM), Moderna (NASDAQ:MRNA) and Datadog (NASDAQ:DDOG).
So what are some upcoming IPOs to consider? Let’s take a look at seven:
- Sigilon Therapies
By all accounts, the IPO market shows few signs of slowing down anytime soon. Investors continue to have a big appetite for growth plays.
Upcoming IPOs To Watch: C3.ai
Thomas Siebel is a legend in the technology world. He was one of the early employees at Oracle (NYSE:ORCL) and critical for the company’s staggering growth in the 1980s. In the early 1990s, he went on to create Siebel Systems, which pioneered the multi-billion dollar CRM (Customer Relationship Management) market.
After all this, he could have retired. But he instead founded C3.ai in 2009. Before many other saw the opportunity, he set out to build a platform to help companies with enterprise AI.
Now C3.ai is planning to come public. And it should have little trouble ginning up interest from investors.
The company’s enterprise AI platform is a SaaS (software-as-a-sevice) offering that can be deployed across a myriad of platforms, such as Microsoft’s (NASDAQ:MSFT) Azure, Amazon’s (NASDAQ:AMZN) AWS, IBM (NYSE:IBM) Cloud and Google Cloud. It is also available for on-premise environments.
During the past year, revenues soared by 71% to $156.7 million. The company has also been able to secure large contract value customers. The average contract amount has expanded from $1.2 million in 2016 to $12.1 million in 2020.
C3.ai puts the estimated market opportunity at $174 billion. And the forecast is for spending to hit $271 billion by 2024.
For the IPO, the company plans to list on the NASDAQ under the ticker AI. The lead underwriters include Morgan Stanley (NYSE:MS), J.P. Morgan (NYSE:JPM), Bank of America (NYSE:BAC) and Deutsche Bank (NYSE:DB).
Earlier in the year, DoorDash was one of the most hotly anticipated IPOs, though it had confidentially filed its S-1. But the company had to postpone the offering due to the rapidly spreading Covid-19 pandemic.
The company, which operates an on-demand marketplace for restaurant delivery, actually needed that time to handle the influx of demand. Restaurants were scrambling to provide delivery to bolster their operations.
During the first nine months of 2020, the revenues spiked from $587 million to $1.92 billion. There was also positive cash flows of $149 million, compared to negative $533 million over the same period a year prior.
DoorDash is the biggest delivery operator in the U.S., with more than 390,000 merchants, 18 million customers and a million Dashers. The company also has a subscription business, called DashPass, which has over five million members.
DoorDash faces tough competition, such as from Uber (NYSE:UBER) and GrubHub. Yet the market is enormous and should allow for multiple players.
The DoorDash IPO is likely to hit the markets in the first half of December. The shares will be listed on the NYSE under the ticker of DASH and the lead underwriters include Goldman Sachs (NYSE:GS), J.P. Morgan, Barclays (NYSE:BCS), Deutsche Bank, RBC Capital Markets and UBS Investment Bank (NYSE:UBS).
Upstart is a fintech company operating an AI-based lending platform. The systems evaluates customer risks, then connects them with a bank partner. This typically translates to higher approval rates, lower interest costs and faster processing. Since the company was founded in 2012, it has originated over 620,000 personal loans.
The underlying AI is constantly improving and based on more than 1,600 variables. That’s definitely a critical competitive advantage.
For the first nine months of this year, Upstart posted $146.7 million in revenues, up from $101.6 million over the same period last year. The company generates much of its revenues from banking referral fees.
Regarding the IPO, Upstart plans to list on the NASDAQ under the ticker of UPST and the lead underwriters include Goldman Sachs, BofA Securities, Citigroup (NYSE:C), Jefferies and Barclays.
Among IPOs to expect, Airbnb is no question the most eagerly awaited. The company is the pioneer of the home-sharing industry and is expected to raise over $3 billion.
But earlier in the year, the company was hit hard by the pandemic as travel came to a screeching halt. Yet the company took swift actions, such as by raising $2 billion in debt equity, cutting back on costs and focusing more on local-stay business.
The result is that Airbnb has stabilized operations; the company has even been able to achieve profitability.
In terms of the platform for Airbnb, it is substantial. It has 5.6 million active listings and there are over 4 million hosts across more than 220 countries and regions.
Airbnb plans to list on the NASDAQ under the ticker ABNB. Lead underwriters include Morgan Stanley, Goldman Sachs, Allen & Company, BofA Securities, Barclays, Citi, BNP Paribas, Mizuho Securities, Credit Suisse (NYSE:CS), Deutsche Bank, Jefferies and Wells Fargo Securities.
Founded in 2004, Roblox has built a platform that is focused on kids. There are also tools that allow for developing immersive 3D experiences. Because of this approach, Roblox has been able to create a diverse set of games. Note that there are over 960,000 developers on the platform.
Over the years, growth has been robust — which is no easy feat to achieve as kids can be quite fickle! But there are currently 31.1 million DAUs (Daily Active Users) spanning more than 180 countries. Revenues soared by 68% to $588.7 million for the first nine months of this year. According to the S-1, the biggest driver has been the Covid-19 pandemic, since millions of kids have had to stay home.
It looks like the Roblox IPO could raise over $1 billion and that the offering will happen sometime in the first half of December. The company plans to list on the NYSE under the ticker RBLX and the lead underwriters include Goldman Sachs, Morgan Stanley, J.P. Morgan, Allen & Company, BofA Securities and RBC Capital Markets.
Sigilon Therapeutics is a clinical-stage biotech company focused using therapeutic molecules for treating chronic diseases. To this end, the company has built the Shielded Living Therapeutics, or SLTx, platform. The goal is for developing off-the-shelf, controllable and redosable drugs that essentially modify a patient’s genes or immunosuppression.
The lead candidate is SIG-001, which prevents bleeding in patients who have moderate to severe Hemophilia A. Note that the company has obtained acceptance for an IND submission in the U.S. as well as a CTA in the U.K. The Phase I/II clinical trial was initiated in October.
Some of the other applications for SLTx include mucopolysaccharidosis type 2, Fabry disease and age-related macular degeneration.
For the IPO, the company plans to list on the NASDAQ under the ticker of SGTX and the lead underwriters include Morgan Stanley, Jefferies, Barclays and Canaccord Genuity.
Affirm is a fintech payments operator. The founder and CEO, Max Levchin, is a pioneer in the category. Consider that he co-founded PayPal (NASDAQ:PYPL) back in the late 1990s.
The Affirm platform makes it easy for users to personalize installment loans, which have terms between six to 18 months. The interest is determined by a sophisticated AI model.
Another advantage for Affirm is its transparency. The terms are clear-cut and there are no late fees, penalties and compounding interest.
As for the growth, it has been strong. For fiscal 2020, the revenues spiked by 93% to $510 million. There has also been a continued drop in the net loss. In the latest quarter, it was $15.3 million or about half the level of the same period a year ago.
The company plans to issue its shares on NASDAQ under the ticker of AFRM and the lead underwriters include Morgan Stanley, Goldman Sachs, Allen & Company, RBC Capital Markets, Credit Suisse, and Barclays.
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.