When asked about the financial implications of a global economic crisis brought on by a pandemic, few would have predicted the vibrant IPO and DPO (Direct Public Offering) market that we find ourselves in today. Already in 2021, we've seen Affirm, Poshmark, Qualtrics, and Bumble go public.
Let’s take a look at some of the most exciting tech IPOs and DPOs to watch for that are likely to come later this year:
1. Instacart
Not too long ago, analysts were skeptical of the food-delivery space. IPOs such as Blue Apron—which became the poster child for IPO failure—only added fuel to the fire. Forbes called the DoorDash IPO “the most ridiculous IPO of 2020”, questioning the timing of the announcement amidst vaccines which many predict will trigger a decline in dining out behavior.
Of course, right now we all miss dining out with friends and savoring a leisurely meal. But how many consumers miss grocery shopping? Unlike the shared experience of dining out, many who had never previously used online grocery delivery services will continue to do so after the pandemic.
Keep an eye on Instacart, which has become an essential business for so many during the pandemic. Instacart reached its 2020 goals by the 5th week of shutdown and, according to CEO Apoorva Mehta, the company surpassed its 2022 goals. What’s more, the number of support staff climbed from 1,200 to 18,000 since the beginning of the pandemic as demand has skyrocketed.
2. Nextdoor
Remember Mister Rogers, a friendly neighbor to so many of us? He reminded us of the value of community and of knowing our neighbors. Today, we still live in neighborhoods, but, more than ever before, we often don’t know our neighbors.
Nextdoor.com is a private communications platform for neighborhoods, enabling support for things like lost pets and items, recommendations for trusted service providers, and even social events like walking groups, fireworks displays, and more.
IPO rumors suggest a possible valuation in excess of $4 billion for Nextdoor. Yet to be determined is whether this will be an IPO or a direct listing.
3. Coinbase
Even those of us who haven’t thrown away $127M worth of bitcoin will agree that data security ought to be at the core of cryptocurrency. Coinbase—the largest cryptocurrency exchange in the US—has succeeded where others have failed by keeping its users’ personal data secure.
When it goes public, Coinbase will depart from the traditional IPO and instead will list directly on an exchange. Why is Coinbase following the direct listing lead of the likes of Spotify and Asana? As Forbes describes, “this non-traditional yet trendy choice makes a certain amount of sense for the Coinbase narrative, given that the company has aided and abetted the similarly non-establishment cryptocurrency craze over the past decade”.
4. Roblox
Sign up and start having fun! That’s the invitation extended by Roblox as users enter their site. Roblox is an online game platform that allows users to program and play games created by other users. While many have become intimately familiar with Roblox over the past few years as it has risen to global prominence, others are just realizing just how dominant the platform is. Roblox is arguably the most popular game in the world.
Roblox’s recent last-minute decision to switch from a traditional IPO to a direct listing is intriguing. Investopedia suggests that the change in plans is due to pricing issues inherent in the market. Many experts have said the company’s decision to pursue a direct listing shines a light on issues inherent in the IPO process. Either way, their global presence makes their listing one worth keeping an eye on.
5. ThoughtSpot
ThoughtSpot promises to find insights in company data within seconds. They work with enormous companies–including the likes of Walmart and streaming platform Hulu.
The recent shift to remote working fuels the digital-first tools offered by ThoughtSpot, which act as an internal search engine for employees to quickly and easily sift through relevant data wherever they are.
We have yet to see the financials on ThoughtSpot, but there is still time as it is rumored that the IPO will take place in late fall—plenty of time for CFO Mohit Daswani (who has had successful stints at both Square and PayPal) to ready the company for public debut.
To some extent, the pandemic is fueling the IPOs and direct listings that we’re seeing in 2021. But the value propositions underlying most of these companies are not dependent on the pandemic. Assets like food, kindness, and fun are fundamental human needs. The pandemic has merely accelerated—rather than instigated—our understanding of just how fundamental and valuable they are.
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