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Depending on the region, 2023 could have been categorized as a bumper or a bust for IPOs. A review of IPOs in 2023 by global consulting firm EY, shows that global IPO volumes fell 8%, with transaction volumes down by a third when compared with the same figures in 2022.
On a regional level, however, there will be varying perspectives on the year. An economic slowdown in China, for example, translated into less IPOs in the Asia Pacific region. In 2023, 732 companies went public across the region, raising just under $70 billion, a year-on-year fall of 18% and 44% respectively.
In the Americas, on the other hand, the picture was much rosier. 2023 saw a 15% rise in the number of listings and a remarkable three-fold increase in proceeds - spurred on by a resurgence in megadeals. The PWC report notes that In total, 153 deals raised US$22.7b, with over 85% of them listing on US exchanges.
Goldman Sachs predicts that dealmaking and IPOs will rebound in 2024.
SourceCo PE deal sourcing firm's team looks at some of the highlights of this predicted rebound.
Estimated valuation: ~$3 billion.
Expected IPO date: September 2024
Industry: Consumer services
Peer-to-peer car sharing platform Turo already generates revenue of nearly $800 million. Its business model is like ‘Airbnb for cars,’ whereby individuals can rent out their personal cars to strangers for a set period of time. Turo has around 100,000 active hosts (vehicle owners), nearly 200,000 vehicles, and nearly 1.5 million active users. However, despite these impressive numbers, it has lost hemorrhaged over $500 million since its inception.
A touted IPO would solve the cash flow issue, and introduce Turo to a new audience. In an unorthodox move for IPOs, it has stated that it would like to sell 5% of outstanding shares to users (presumably to incentivize them to stay on the platform). Although a $3 billion valuation appears like a lot for a company that hasn’t been profitable yet, recall that Uber had a valuation of $75 billion at its IPO, and it too hadn’t yet been in the black.
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Estimated valuation: $60 billion.
Expected IPO date: December 2024
Industry: Fashion
Shein is a a fast fashion giant founded in China, which has a unique operating model. While most fast fashion companies produce tens of thousands of a single clothing line, Shein produces a few hundred units at a time, testing their popularity among the target group. High popularity products are then reproduced in greater numbers and less popular items are left behind. The result, in theory at least, is less unwanted inventory.
High turnover and low inventory should be music to investors’ ears and some people have touted this IPO to give the company a valuation as high as $90 billion on the basis that its competitor H&M has a market capitalization of $27 billion, and isn’t growing as quickly. An audit of the company and its supply chain appears to be required before an SEC listing will be approved. For this reason, we suggest an IPO date closer to the end of 2024.
Estimated valuation: ~$15 billion.
Expected IPO date: April 2024
Industry: Technology
Reddit is one of those names that frequently appears on potential IPO lists, owing to its filing for an IPO in December 2021, and subsequent ‘failure to launch’ in March 2022. When the market for digital advertising became choppy around that time, its management decided it was better to shelve the listing for a more opportune time. With everyone expecting a bounceback in 2024, it appears that opportune time may have arrived.
In 2023, Reddit made several structural changes that appeared to hint at a desire to become more attractive to investors. These included an enforcement of data rate limits on the free access tier of its API. If this didn’t endear it to users and moderators, it at least shored up some of the outgoing cash, which will appeal more to IPO followers. Last year we gave this a $10 billion valuation, but $15 billion may be more appropriate in a rising market.
Estimated valuation: ~$4 billion.
Expected IPO date: June 2024
Industry: Fashion
SKIMS is a fashion (specifically, ‘shapewear’) brand created by Kim Kardashian and endorsed by several high profile pals of hers. Just three years into operations, the company has been valued by a funding round at $4 billion. It uses a direct-to-consumer model, giving it higher margins than many competitors, and it’s likely that Kardashian’s global fame means that it doesn’t need as much marketing spend as its competitors.
Will this prove a hit with investors? An IPO is a good way to find out. In a move which has been interpreted by many as preparation for a public listing, SKIMS recently appointed former Nike executive Andy Muir as Chief Financial Officer. Although some have suggested that the $4 billion valuation recently achieved may understate the value of the firm, we believe that a company is usually only as valuable as its last funding round.
Estimated valuation: ~$5 billion
Expected IPO date: October 2024
Industry: Food
Impossible Foods is a pioneers in sustainable plant-based food. It produces plant-based meat, fish, and dairy alternatives. Its founders aimed for it to be the ‘tech industry’s answer to the Big Mac,’ and the publicity it generated helped to spawn a host of imitators over the past five years. Might this have dented the value of Impossible Brands? The fact that the value of its employees’ shares fell 89% in 2023 suggests that it might have.
Undeterred, an IPO is on the cards. Impossible Foods CEO, Peter McGuiness said in 2022 that an IPO “will happen” but probably not in 2023. Most onlookers are speculating about the last quarter of the year, so we estimate sometimes around October. In terms of the valuation, the last funding round valued the company at $7 billion, but we shave some off the top given recent valuation drops in this space, and suggest an IPO valuation of around $5 billion.
Estimated valuation: ~$4 billion
Expected IPO date: March 2024
Industry: Data security
Rubrik, the Palo Alto-based data protection firm is another company on this list that has previously attempted an IPO but decided against taking the plung when market conditions didn’t cooperate. It provides its clients with a data protection platform that enables them to back up the information that they store on public cloud infrastructure, on-premises hardware, and in SaaS applications. It currently serves more than 5,000 organizations.
Plans for the IPO are reported to be well underway. The company is believed to have hired Goldman Sachs, Barclays, and Citigroup as lead underwriters, as well as seven other high-profile investment banks to support the main efforts. With so many big name financial institutions, it’s clear that this time Rubrik is taking an IPO very seriously indeed. It also won’t want to keep paying them for too long, so we suggest a March IPO.
Estimated valuation: ~$9.5 billion.
Expected IPO date: May 2024.
Industry: SaaS
ServiceTitan, a Los Angeles-based startup that makes software to help contract workers manage their businesses, first tried to go public in 2021 but postponed those plans in November 2022 when the short-lived boom that year faded. At around that time, SaaS businesses were trading for obscene EBITDA multiples that even the most canny investment bankers were finding difficult to justify.
Less than two years on and moves are afoot to revive the IPO. Reuters reports that the company has hired Goldman Sachs and Morgan Stanley to prepare the groundwork for a listing some time in 2024 - possibly as early as the second quarter. Some have speculated that the listing could generate $18 billion but this is based on 2021 EBITDA multiples, and the most recent funding round gave a valuation of $9.5 billion, which we believe is more reasonable.
Estimated valuation: ~$10 billion.
Expected IPO date: May 2024.
Industry: Food and Beverages
It wasn’t too long ago that Panera Bread was trading on the NASDAQ under the ticker PNRA. Then, in 2017, JAB Holding, the investment arm of the Reimann family, took the company private for $7.5 billion. Having restructured the company, JAB Holding tried to take it public again in 2021 but a rather complex deal with a SPAC fell through, meaning the deal was shelved.
Now, it appears that a public listing is firmly back on the agenda. Panera Brands, the parent company of Panera Bread, Einstein Bros. Bagels, and Caribou Coffee, has reportedly filed confidentially for an initial public offering (IPO). Given the eagerness shown in the past to make this happen, we believe that a listing in the first half of the year, around May, should be feasible. The $10 billion valuation is based solely on 2017’s $7.5 billion takeover.
Estimated valuation: ~$7 billion.
Expected IPO date: November 2024
Industry: Financial Services
Klarna is a Swedish buy-now pay-later platform which was founded by Sebastian Siemiatkowski. Mr. Siemiatkowski believes that the company can become a trillion dollar company, although it may take a little longer than he intends: From a $46 billion valuation during the Coronavirus epidemic, a recent valuation put the company’s value at $6.7 billion - a massive 85% decrease in value from its peak.
A November 2023 TechCrunch article noted that ‘Klarna is inching towards an IPO.’ In addition to setting up a holding company in London - where it is assumed it would trade on the FTSE - the company also broke profit and achieved revenue of around $550 million. Although a date hasn’t been set, pressure from some early investors must be weighing heavy now. We’re betting on a November 2024 listing.
Estimated valuation: ~$50 billion
Expected IPO date: December 2024
Industry: Financial Services
It seems as though no IPO forecast would be complete without the by now annual mention of a potential Stripe IPO. Given that the company secured funding of $6.5 billion in early 2023, the Stripe IPO will only happen in the second half of the year, if at all. Somewhat concerning for the company’s current investors must be the drop off in value for the company. Two years ago, its value was touted at around $100 billion. Now, it’s around half that.
The most impressive thing about Stripe is its ubiquity. It appears nearly impossible to make an e-commerce transaction these days without using its technology. That also applies to whether you’re using Google Pay, Paypal, or any number of Fintech platforms. We also know that Stripe registered with the SEO in 2021, so an IPO is certainly being planned. It’s just a matter of when. We suggest December 2024.
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