The U.S. initial public offering market is starting to edge upward, albeit at a slow pace, in the first three months of 2023. According to Renaissance Capital, there have been 23 IPOs priced through mid-March — that’s up by 27.8% over the same period in 2022.
Renaissance reports that total proceeds for U.S. IPOs stand at $2.2 billion for 2023 so far. That’s about a 5% boost from the first quarter of 2022, when Russia invaded Ukraine, roiling the markets. Last year was one of the slowest for IPOs in decades, according to Renaissance.
Solar equipment firm Nextracker Inc. (NXT) led the IPOs list in 2023, raising $638 million in its debut.
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With some tailwinds forming, what’s the outlook for companies looking to go the IPO route for the rest of 2023? Here’s a look at some of the top brand-name IPO players going forward, although few of them are firming up plans for an imminent listing.
| Private company | Potential 2023 IPO valuation |
| Arm Ltd. | $50 billion |
| Stripe Inc. | $55 billion |
| Reddit Inc. | $10 billion |
| Instacart Inc. | $10 billion |
| Databricks Inc. | $38 billion |
| Chime Financial Inc. | $25 billion |
| Discord Inc. | $15 billion |
| Plaid Inc. | $13 billion |
| TripActions Inc. (Navan) | $12 billion |
| Klarna Bank AB | $6.7 billion |
Arm Ltd.
This British microchip designer is on the move in 2023, with analysts expecting the company, owned by Japan-based SoftBank Group Corp., to raise about $8 billion in its U.S. IPO later in 2023. The company is changing its pricing model in advance of going public, adjusting its royalty program to charge semiconductor developers for deploying its designs based on a particular semiconductor chip’s market value. To date, Arm has charged chip customers based on the value of chip-enhanced devices. The strategy should result in higher royalties and add even more luster to Arm’s upcoming IPO.
Potential IPO valuation: $50 billion
Stripe Inc.
With $14.4 billion in revenue in 2022, you’d think Stripe’s long-awaited IPO (first rumored to happen in 2021) would finally take flight. A recent Reuters post notes that Stripe is on the cusp of a $4 billion boost in capital, which would place the payment provider’s valuation at about $55 billion. Yet that scenario actually decreases the company’s need for capital, even with a reportedly huge IRS tax bill coming due this year (the company now has plenty of cash to cover its tax bill.) Meanwhile, company co-founders Patrick and John Collison are expected to soon decide whether or not to file an IPO in the second half of 2023.
Potential IPO valuation: $55 billion
Reddit Inc.
Like Stripe, Reddit was angling for a 2021 IPO that never materialized, after the social media giant actually filed to go public with the U.S. Securities and Exchange Commission. A downbeat 2022 tabled those plans, but analysts believe Reddit has a green light for an IPO in the second half of 2023. Reddit is certainly one of the most popular social media platforms, with an extremely loyal user base of more than 1.2 billion users and over 57 million daily users. Investors should be ready to go when Reddit does announce it’s going public, as the company filed its IPO privately and any IPO rollout will arrive on short notice.
Potential IPO valuation: $10 billion
Instacart Inc.
Instacart was upended by a volatile 2022 stock market, which led the digital retailer to postpone its IPO. It’s uncertain when the IPO will roll through, although analysts remain bullish on a late 2023 debut. Instacart has seen its valuation tumble from $39 billion in 2021 to approximately $10 billion in the first quarter of 2023. In fact, the company is only now emerging from a vast cost-slashing campaign involving job cuts. On the upside, the online grocery delivery and order-for-pickup markets are on an upswing, and Instacart’s revenue increased by 50% in the fourth quarter of 2022 compared with Q4 2021.
Potential IPO valuation: $10 billion
Databricks Inc.
This San Francisco-based cloud computing analytics company is exploding in the age of artificial intelligence and big data. The company boasts brand-name clients like Conde Nast, Shell and H&M. In fact, a reported 40% of Fortune 500 brands have deployed Databricks’ cloud computing services. Company executives have been quiet about the firm’s IPO plans, but analysts say Databricks is most likely to file a Nasdaq IPO in the second half of 2023.
Potential IPO valuation: $38 billion
Chime Financial Inc.
In February, Chime announced that it, too, would delay its IPO until at least the second half of 2023. The delay comes with the same baggage as numerous financial company IPOs, but fintech has been an especially hard-hit group lately. As measured by the F-Prime Fintech Index, fintech stocks plummeted by more than 70% in 2022. Still, Chime seems primed to move forward on the IPO, with the online banking services provider reportedly looking to weather the current global banking uncertainty and proceed later in 2023 or in 2024, depending on the economy.
Potential IPO valuation: $25 billion
Discord Inc.
With demand rising for instant messaging and streaming services, especially among the younger video-gaming generation, Discord has long been rumored to go public in a big way — but that hasn’t happened yet. The San Francisco-based tech company has already turned down a $12 billion buyout offer from Microsoft Corp. (MSFT), so confidence among top company decision-makers isn’t a problem. Neither is cash flow, as the company has raised $1 billion in financing in recent years and has a profitable monthly streaming service that is gaining steam. So why not be confident in Discord? After all, can 150 million active monthly users be wrong?
Potential IPO valuation: $15 billion
Plaid Inc.
Plaid ended 2022 on a sour note, furloughing 20% of its staff and delaying its IPO after a lackluster year. Yet stretch the lens out and Plaid has some formidable advantages going for it as a publicly traded stock. The company has privately raised more than $730 million since its inception and has established ties with 200 million consumer banking accounts, aiming to connect with the 11,000 financial institutions that serve those customers. Meanwhile, Plaid, like its competitor Stripe, has sidelined any decision about a 2023 IPO, even as its user base has grown by 50% in the past year.
Potential IPO valuation: $13 billion
TripActions Inc. (Navan)
In September 2022, TripActions reportedly filed paperwork to go public with a $12 billion valuation. The corporate travel and expenses company raised $300 million in private financing in October 2022, much of which came from Wall Street investment firm Goldman Sachs Group Inc. (GS). In February, the company threw investors a curveball by rebranding itself as Navan, a move that CEO Ariel Cohen said made the company “more accessible” and more reliant on OpenAI for customer support needs. Cohen also said the company is “mature” enough for an IPO, but the “market doesn’t support it yet.” The firm is adding about 300 customers per month to its stable of 9,000 business travel clients, Cohen said.
Potential IPO valuation: $12 billion
Klarna Bank AB
This Sweden-based buy-now-pay-later leader raised $800 million in funding in July 2022 as its IPO valuation fell from $46 billion to $6.7 billion, an 85% drop. Its subpar financial performance in 2022 didn’t help matters. On the upside, Klarna services 150 million active users through 500,000 merchants in 45 countries, making it the largest fintech company in Europe. In a recent interview with TechCrunch, Klarna CEO Sebastian Siemiatkowski reported a 71% year-to-year boost in U.S.-based gross merchandise value, marking massive inroads into the U.S. marketplace. Like many emerging companies, Klarna seems to be biding its time and tracking the economy before clarifying any potential IPO in 2023.
Potential IPO valuation: $6.7 billion
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10 Best Upcoming IPOs to Watch in 2023 originally appeared on usnews.com
Update 03/31/23: This story was published at an earlier date and has been updated with new information.
