Look for these names to hit public markets in 2023.
The year 2022 wasn’t exactly a banner one for U.S. initial public offerings, with 178 IPOs as of Dec. 26. That’s down from 1,035 IPOs in 2021 – an 83% drop. That decline also poured cold water on total IPO cash values, which stand at $7.7 billion so far in 2022, down more than 94% from 2021. High-profile IPOs from 2021, such as Rivian Automotive Inc. (ticker: RIVN), are trading well below their IPO prices. Rivian shares are down 82.9% in 2022 through Dec. 27. Robinhood Markets Inc. (HOOD), another big-name IPO from 2021, has slid 56.6% in 2022. However, 2023 offers the IPO market a fresh start with some promising flotations lined up. If market conditions improve and it’s a green light for IPOs in 2023, these high flyers are at the top of the list.
Stripe Inc.
This digital payment processing services provider heads into 2023 with a lower valuation (about $74 billion) than when 2022 started (about $94 billion). The company also slashed its labor force by 14% during the “fintech winter” of 2022, with both moves designed to show Wall Street that Stripe is a viable investment for the long term. With cash beginning to burn a hole in investors’ pockets, Stripe could stand as the most targeted IPO by investors heading into 2023.
Potential 2023 IPO valuation: $59 billion to $74 billion
Arm
This semiconductor company has a global reach, as its products wind their way into the lives of 70% of the public. Once a shade away from being bought out by chip giant Nvidia Corp. (NVDA) in 2020, Arm is gaining speed on its own with $656 million in revenues and a 9% increase in microchips shipped during its most-recent quarter. Company leaders describe its IPO progress as “advanced.” With the goal line in sight, the company fits the bill as one of the most prominent and promising IPOs for 2023.
Potential 2023 IPO valuation: $40 billion to $60 billion
Databricks Inc.
This San Francisco-based company, launched in 2013, is at the vanguard of the cloud computing/big data revolution. The company’s mission is to make cloud computing more efficient and easier to manage and optimize for 5,000 client companies across the globe. With revenues over $1 billion and an accelerating year-on-year growth rate, Databricks is likely another high-profile candidate for a 2023 public share offering, although no specific dates have been set for an IPO.
Potential 2023 IPO valuation: $38 billion
Chime Financial Inc.
This San Francisco-based mobile-banking services provider was also set for an IPO in early 2022, with a reported valuation of between $35 billion and $45 billion. The company pulled the plug as fintech companies were logging massive financial losses, yet the IPO community fully expects Chime to go public in 2023. Company founder and CEO Chris Britt seems fully committed to an IPO, telling the media that Chime “has every intention of being a large, independent company.” Britt could be setting the stage for a 2023 IPO by laying off 12% of Chime employees in a big cost-cutting move earlier in 2022.
Potential 2023 IPO valuation: $25 billion
Discord Inc.
This San Francisco-based instant-messaging platform, with over 13.5 million active servers and 150 million users per month, was supposed to launch its IPO in 2022. Yet a tepid 2022 stock market slowed Discord’s momentum, pushing its IPO date back to 2023. Discord management reportedly turned down a $12 billion buyout offer from Microsoft Corp. (MSFT) – a likely competitor in the hypercompetitive online video game messaging marketplace – but the company should move ahead with its proposed IPO, which has a valuation of $15 billion heading into the new year.
Potential 2023 IPO valuation: $15 billion
Reddit Inc.
One of the most popular social media platforms with over 1.2 billion users and 52 million active daily users, Reddit is aiming to fly high with its 2023 IPO. So-called meme investors remain passionate about Reddit and what it represents as a social media home for the average investor. With those backers in mind, Reddit, with a potential valuation of $10 billion to $15 billion and a debut slated for the middle of the year, offers as much upward opportunity as any IPO in 2023.
Potential 2023 IPO valuation: $10 billion to $15 billion
Instacart Inc.
In October, Instacart postponed its 2022 IPO, yet was mum on the exact reasons why. Analysts have pointed to a lousy market for IPOs and a shaky stock market as the likely culprits. That’s unfortunate for Instacart, as its most recent funding round in 2021 showed a valuation upwards of $39 billion. In 2022, that number plummeted to $24 billion, a nearly 40% decline. Instacart, too, is in cost-cutting mode, slashing 3,000 jobs and hitting the pause button on new hires, in an effort to impress investors in 2023.
Potential 2023 IPO valuation: $13 billion
Plaid Inc.
With approximately 80% of Americans opting to bank digitally, there should be a home in any investment portfolio for a company aiming to ensure online financial consumers and businesses can interact with financial accounts safely and strategically. That’s what Plaid does, but 2022’s fintech winter slowed the company down and kept its IPO on the sidelines. A listing in 2023 is not guaranteed, as Plaid’s management team has said any IPO talk is off the table right now. That said, if inflation wanes, interest rates decline and investors jump back into the market, Plaid, with an updated market valuation of $13 billion and estimated revenue growth of 60%, could see its fortunes improve — and push its shares public in 2023.
Potential 2023 IPO valuation: $13 billion
TripActions Inc.
This cloud computing startup recently raised $400 million in the last quarter of 2022, with the bulk of that cash coming from Goldman Sachs. The company, which handles staff expenses for business trips and other related payments, also filed for an IPO in the spring of 2023, with an estimated valuation of $12 billion. The company, which claims over 8,000 corporate customers and has recently purchased four global business travel companies, appears to be well positioned for a successful IPO — once the economic clouds lift.
Potential 2023 IPO valuation: $12 billion
Klarna Bank AB
The buy-now-pay-later (BNPL) leader has had a rough go of it in 2022, losing $580 million in the first six months of the year and cutting 10% of its workforce. The Sweden-based company, like a lot of big-name brands, had planned to go public in 2022 with a $50 billion valuation but has tabled its IPO until 2023. The company can legitimately say, however, that a declining global economy and higher interest rates steered potential BNPL customers away in 2022 and, in better times, those customers should come back in droves. With an intriguing business model that offers revenues from merchants (who pay transaction fees) and from shoppers (who may wind up paying loan interest and user fees), Klarna could be a robust IPO play in 2023.
Potential 2023 IPO valuation: $6.7 billion
10 best IPOs for 2023:
— Stripe Inc.
— Arm
— Databricks Inc.
— Chime Financial Inc.
— Discord Inc.
— Reddit Inc.
— Instacart Inc.
— Plaid Inc.
— TripActions Inc.
— Klarna Bank AB
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Update 12/28/22: This story was published at an earlier date and has been updated with new information.
