The IPO market absolutely exploded in 2021. The number of initial public offerings concluded this year was the highest since 2000, and the amount of money raised totaled $142.5 billion, smashing the 2000 record total of $96.7 billion.
Recall, however, that the IPO markets tanked in 2001, with just 83 companies completing their public offerings while raising $40.8 billion in fresh capital. According to IPO tracker Renaissance Capital, poor returns following the majority of 2021 IPOs yielded an average return of −10%, the worst in more than 10 years, even though first-day pops averaged nearly 31% for the 399 IPOs concluded this year.
The following chart, based on Renaissance Capital data, lists the 10 largest IPOs of 2021. The largest deal was electric maker Rivian’s $11.9 billion capital raise and the tenth largest was Playtika’s $1.9 billion deal.
|Company||Ticker||IPO Date||First Day Pop||IPO Return|
|DiDi Global||DIDI||June 29||1.0%||−54.1%|
|Nu Holdings||NU||Dec. 8||14.8%||20.1%|
|Global Foundries||GFS||Oct. 27||−1.3%||30.2%|
In addition to these traditional IPOs, cryptocurrency exchange Coinbase’s direct listing opened for trading at a valuation of just over $100 billion. And then there were the SPACs.
Renaissance Capital reported that 604 SPAC mergers occurred this year, the highest number ever and more than double 2020’s total of 248 deals. Total capital raised came to $143.5 billion, more than the capital raised in all SPAC mergers combined since 2007. The year’s largest SPAC deal was Southeast Asia superapp Grab’s December deal that valued the company at $39.6 billion. EV maker Lucid’s SPAC deal valued the company at nearly $24 billion.
For 2022, Renaissance Capital does not expect to see the same record-breaking level of IPOs we saw in 2021. Health care IPOs are expected to remain active, as are those of tech companies. The firm cited companies like yogurt maker Chobani, Brazilian steakhouse chain Fogo and HR platform provider Justworks as top candidates.
Crunchbase, a pre-IPO tracker, has just released its list of 30 companies it says are its top picks for a 2022 IPO. Here’s a brief look at some of Crunchbase’s top picks in several different categories.
In enterprise tech and cybersecurity, Boston-based Cybereason extended detection and response technology has become popular thanks to the work-from-home model that was forced on businesses due to the COVID-19 pandemic. The company recently raised $275 million in venture funding at a valuation of $3.1 billion. Other potential IPOs in this space include Databricks, Everlaw and Rippling.
Potential IPOs in fintech and banking include payment processor Stripe, which was last valued at $95 billion after a capital raise in March. Other solid possibilities include Sweden-based buy-now-pay-later giant Klarna and San Francisco-based Plaid that had its $5.3 billion acquisition by Visa ended when the U.S. Department of Justice filed a lawsuit to stop the deal.
Consumer-focused firms like grocery delivery service Instacart, as well as ServiceTitan, a platform for connecting consumers and service providers, are also likely IPO candidates, according to Crunchbase.
In the real estate and e-commerce space, Divvy Homes has raised $1.2 billion in venture funding, but its business model (buying homes and then reselling them on a rent-to-own basis) is capital intensive and the company may end up with a SPAC deal.
In the area of agriculture, food and live sciences, a likely IPO is in the cards for Impossible Foods, the meatless burger company that has raised some $2 billion in venture financing since its founding 10 years ago.
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