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The 2020 IPO Outlook: 13 Offerings On The Docket

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The 2020 IPO Outlook: 13 Offerings On The Docket

The IPO market is heating up, with many companies filing paperwork to go public over the last two weeks.

These recently announced IPOs and some carryovers from the first half of the year point toward a hot IPO market after Labor Day. Here's a look at 13 upcoming IPOs that investors should have on their radar. 

Airbnb: Vacation rental platform Airbnb is set to go public in 2020 after confidentially filing paperwork. The company has seen its valuation fall and now is suffering a loss of revenue due to the COVID-19 pandemic.

After seeing revenue of more than $1 billion in the second quarter of 2019, that figure is now said to have fallen to $335 million, dropping around 67%. First-quarter revenue for 2020 was $842 million. The company will be hoping for a recovery in the travel industry and may wait to officially go public until its numbers improve. 

Amwell: Amwell made news recently for two reasons. The company is planning to go public and also announced a $100-million investment from Alphabet Inc's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google.

Amwell, a leading telehealth company, will switch most of its services to Google Cloud from rival Amazon Web Services (NASDAQ: AMZN). Amwell reported that first-half 2020 revenue was up 777% to $122 million. April virtual visits were as high as 40,000 per day versus last year’s 2,900. The company reported 2.2 million total visits in the recent second quarter.

Rival Teladoc Health (NYSE: TDOC) has seen its stock rise more than 270% in 2020.

Asana: Facebook (NASDAQ: FB) co-founder Dustin Moskovitz founded Asana as a productivity platform for workforces. The company had 3.2 million free accounts and 1.2 million paid users in January. The company saw revenue increase 86% in fiscal 2020 to $142.6 million. Asana competes in a work management market that is expected to grow from $23 billion to $32 billion by 2023.

Asana will go public via a direct listing in which existing shareholders sell shares, just like rival Slack Technologies (NYSE: WORK)'s IPO route.

Slack is valued at more than $17 billion and has seen shares rise 37% in 2020. Asana is backed by Al Gore’s Generation Investment Management, which invested $75 million in 2018.

Bentley Systems: Founded in 1984, Bentley Systems calls itself “The Infrastructure Engineering Software Company.” Bentley helps with the design, construction and operations of the world’s infrastructure.

In 2019, Bentley served over 31,000 customers. The company had 96 customers that represented $1 million or more in revenue. Revenue is fiscal 2019 was $736.7 million.

Corsair Gaming: The growth of gaming and streaming has helped Corsair Gaming grow its revenue. Corsair Gaming is a leader in high-performance gear for gamers and streamers. The company has strong market share in items like keyboards, mice, headsets and high-performance memory.

The company reported fiscal 2019 revenue of $1.1 billion. Revenue was $688.9 million for the first half of 2020.

DoubleDown Interactive: South Korean gaming company DoubleDown Interactive has been a strong performer in the social casino market, which is expected to hit $6.8 billion by 2023.

The company’s “DoubleDown Casino” has been a consistent top 20 grossing game since 2015. DoubleDown reported revenue of $273.6 million in fiscal 2019. Net income for the fiscal year was $36.3 million.

GoodRx: GoodRx strives to “help Americans get the health care they need at a price they can afford.” This business model has been profitable for the company since 2015.

The company has the No. 1 most-downloaded medical app. A July 2020 survey found that 68% of health care providers recommend the platform to customers.

In the second quarter, GoodRx had 15 million monthly visitors. Revenue has grown at a compound annual growth rate of 57% since 2016, hitting $388 million in fiscal 2019. Revenue hit $257 million in the first half of 2020, with net income coming in at $55 million. The company believes it can grow, with its platforms competing in $800-billion total addressable markets.

JFrog: Liquid software company JFrog helps power some of the largest companies, providing end-to-end continuous software release management. JFrog has over 5,800 customers, including 75% of the Fortune 100. Revenue in fiscal 2019 of $104.7 million increased 65% from the prior year.

The first six months of 2020 saw revenue rise 50% to $69.3 million.

Pactiv Evergreen: The largest producer of fresh food and beverage packaging in North America recently announced that it will go public. Pactiv Evergreen helps companies like Starbucks Corporation (NASDAQ: SBUX), Mcdonald's Corp (NYSE: MCD), Coca-Cola Co (NYSE: KO) and Kroger Co (NYSE: KR) in the business segments of food service, food merchandising and beverage merchandising.

Revenue in 2019 was comprised of $2.2 billion for food service, $1.6 billion for beverage merchandising and $1.4 billion for food merchandising. The company says its products are used more than 5 billion times a week in the United States.

Palantir: One of the biggest IPOs in 2020 will likely be Palantir. The company — which was co-founded by Peter Thiel, the co-founder of Paypal Holdings (NASDAQ: PYPL) — builds software platforms for companies.

The company’s Gotham and Foundry platforms are used by more than 125 companies in both defense and commercial industries. Revenue grew 25% in fiscal 2019 to $742.6 million. Revenue grew 49% to $481.2 million in the first half of 2020. The company lists its total addressable market at $119 billion, with $56 billion coming from commercial businesses and $63 billion coming from government businesses.

Investors can find exposure to Palantir prior to the IPO with Sutter Rock Capital (NASDAQ: SSSS), where the company makes up 15% of the investment portfolio.

Snowflake: The filing for Snowflake Inc listed Amazon and Microsoft (NASDAQ: MSFT) as both competitors and platform providers.

Snowflake helps mobilize the world’s data and is growing thanks to the rise of the data cloud. Second-quarter revenue was up121% to $133 million. Revenue grew 174% for fiscal 2020, hitting $264.7 million. The company has over 3,100 customers, with 56 of them providing more than $1 million in revenue.

Sumo Logic: The pioneer of Continuous Intelligence, Sumo Logic will go public in 2020. The company provides real-time analytics and insights to customers and processes more than 1.6 quadrillion events a day. The company’s more than 2,100 customers include Major League Baseball, Netflix Inc (NASDAQ: NFLX) and salesforce.com, inc. (NYSE: CRM). 

Revenue hit $155.1 million in fiscal 2020, for growth of 50%. First-quarter revenue of $47.2 million was an increase of 45%.

Unity: Epic Games saw its valuation hit $17.3 billion recently with a new round of investors that include Sony Corporation (NYSE: SNE). Rival Unity will go public in 2020, hoping to get a similar valuation. In 2019, Unity reported revenue of $541.8 million, up from the prior year’s $380.8 million.

Revenue from the first half of 2020 was $351.3 million, led by 716 companies that contribute more than $100,000. The company’s gaming platform is used by more than 50% of mobile, PC and console games and has also been used by movie studios to create scenes in films like “The Lion King.” Epic had revenue of $4.2 billion in fiscal 2019.

Photo courtesy of Airbnb. 

 

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