The once beloved investing hero Robinhood failed to win the hearts of the common people in its highly anticipated initial public offering on Thursday.
The popular zero-commission investing app helped fuel the meme-stock madness of the past year, but its reputation as a democratizing do-gooder suffered a serious blow when it freezed purchases of GameStop and other volatile stocks.
HOOD started the day trading at $38 a share, already at the low end of its initially disclosed range. Then the price dropped as much as 10% before finally settling just 8.4% lower, at $34.82.
For the company’s merry band of followers, who had the rare opportunity to buy some of its IPO shares before trading began, it wasn’t the debut they wanted. But investors eager to capitalize on early trading activity have plenty of other options coming up — and new tools at their disposal.
Here are 12 of the hottest IPOs expected in 2021 and how everyday investors can actually buy in this year.
1. Weber
Here’s “grate” news for grill enthusiasts: Weber, the maker of charcoal, electric and gas barbecues, will be going public this summer.
The company has been around since the early 1950s. It was bought up by BDT Capital Partners LLC in 2010, which helped fund its expansion, especially internationally.
The pandemic hasn’t hurt business, either. With everyone spending more time in their backyards, Weber reported a 62% year-over-year boom in revenue, looking at the six-month period ending in March.
The company filed its IPO paperwork on July 12. Included in the filing was a report suggesting Weber owns 23% of the U.S. outdoor cooking products market and 25% of the category globally.
Weber is expected to start trading in early August with a target valuation of about $5 billion, according to Reuters.
2. Discord
Discord was born in 2015 when two gamers found it challenging to stay in touch while playing together online. They felt the tools available at the time were slow, unreliable and complex.
So they built their own.
Initially, Discord was purely designed to connect gamers, giving them a platform for instant messaging, video calls and voice calls. But in recent years, people are using it for everything from local hiking clubs to art communities to study groups.
Last year, to help with its expansion outside of the gaming community, Discord raised $100 million from investors.
With the COVID-19 pandemic forcing everyone to look for ways to connect from a distance, Discord’s user base skyrocketed to 140 million monthly by the end of 2020. Revenues for the year hit $130 million — nearly a 200% increase from the year before.
After a $12 billion Microsoft takeover fell through, the next step for Discord could be an IPO. There’s no timeline for now, but hopeful investors should keep their eyes peeled for an announcement later this year.
3. Stripe
Yet another trend that benefited from the pandemic: digital payments.
Online shopping is more popular than ever, and most Americans can even imagine a cashless future. Stripe, a payment processing platform, is positioned to reach new heights as the shift in consumer behavior continues.
Stripe helps companies big and small accept digital transactions — and big companies are certainly represented. Stripe powers the transactions of heavyweights like Amazon, Lyft, Instacart and Pinterest.
It’s currently the most valuable private company in Silicon Valley, with a valuation of $95 billion.
In early July, Reuters reported that sources familiar with the matter say the company is taking its first major step towards a stock market debut by hiring a law firm to help with preparations.
The sources added that the listing may not happen this year, but given the company’s value, that won’t stop eager investors from raising their expectations with every major development.
4. Authentic Brands Group
This retail conglomerate makes a business of buying up struggling brands with name recognition like Barneys New York, Nine West, Forever 21 and Aeropostale.
It also owns Sports Illustrated and the intellectual property of celebrities like Marilyn Monroe, Muhammad Ali and Elvis Presley.
It was launched in 2010 by CEO Jamie Salter, who invested $250 million of his own funds. Today, Authentic Brands Group is backed by big-name investor BlackRock, as well as General Atlantic and Leonard Green & Partners, a top private equity firm.
Authentic Brands Group filed its initial paperwork with the Securities and Exchange Commission on July 6. It’s expected to go public in August, when it could achieve a valuation of up to $10 billion.
5. Rivian
This California-based company is a leader in the field of autonomous electric vehicles and could give Tesla, Lucid and Nikola a run for their money.
With the help of powerful backers like Amazon and Ford, the company plans to seriously disrupt the automotive market. In its most recent round of fundraising, Rivian received $2.65 billion from investors.
After years of research and development, the company is launching two vehicles in 2021: a pickup truck and a sport utility vehicle. On top of that, Amazon will receive 100,000 commercial delivery vans.
Rivian’s IPO is expected in the second half of 2021, possibly September. The deal could be worth up to $70 billion, according to a report from Bloomberg.
6. Chime
Chime’s mass appeal is pretty clear: It takes just minutes to set up fee-free mobile banking. You don’t even need a credit check.
Investors see potential, too. Last fall, the company managed to raise $485 million to put it at a valuation of $14.5 billion — making it the most valuable U.S. consumer fintech company, surpassing even Robinhood at the time.
A study in February estimated the app has 12 million users.
Chime’s chief executive Chris Britt has previously declined to comment on when the IPO may come but did say last September that he was aiming to have the company ready within 12 months. That means an IPO could come as early as the fall.
7. Instacart
When the coronavirus pandemic first descended on the U.S., most companies faced a pretty grim forecast of layoffs, furloughs and bankruptcies.
But some companies happened to be perfectly positioned for a dramatic shift in consumer behavior. Instacart, the online grocery delivery company, is one of those “right place, right time” companies.
It’s now partnered with nearly 600 retailers to provide delivery from nearly 45,000 locations across the U.S. and Canada. And after its most recent round of funding, Instacart is valued at $39 billion — up from just $7.9 billion in 2018.
An IPO is still only in the rumor stage; there haven’t yet been any filings or announcements. However, according to Forbes, if it does go public this year, it could be one of the biggest IPOs of 2021, as some believe it could be worth as much as $50 billion.
8. Nextdoor
Feeling a bit distant from your neighbors these days? Rather than getting tangled up in the behemoth known as Facebook, some Americans have turned to neighborhood apps like Nextdoor to replace their block parties.
On Nextdoor, you can sell your old television, ask for advice on where to find the best deals or report a wily coyote roaming around the area.
Nextdoor says the app now includes more than 275,000 neighborhoods, spanning 11 countries. In the U.S., it says, one in three households uses the app.
The company isn’t going public in a traditional IPO. In early July, the company announced it will merge with Khosla Ventures Acquisition Co. II (KVSB), a company already listed on the Nasdaq.
The merger, which is expected to be finalized in the fourth quarter, values Nextdoor at $4.3 billion and would generate about $686 million in gross proceeds for the company.
9. GitLab
GitLab, a site that helps developers share and manage code, had IPO aspirations as far back as 2017.
Before COVID hit, the company had planned to go public in November 2020. But with the economy in turmoil, GitLab put its IPO aspirations on hold.
GitLab co-founder and CEO Sid Sijbrandij told CNBC last summer that “we will go out when we and the markets are ready.”
Late last year, the company let some employees sell a portion of their equity in an offering that valued GitLab at more than $6 billion, CNBC reported at the time.
While Sijbrandij told the network he doesn’t have a timeline for the company’s public debut, sources told the news site late last year that it was likely to come in 2021.
10. The Fresh Market
Five years after the once publicly traded company went private, it’s taking another swing at public life.
In March 2016, struggling to compete in the gourmet grocery market against major competitors like Whole Foods, Kroger and Publix, The Fresh Market accepted a $1.36 billion cash buyout from a private equity firm.
For the past three years, The Fresh Market has focused on strengthening its core business, opting to pause new store openings. Now it plans to resume expansion and is improving its offerings, including ready-to-make meal kits and same-day delivery through Instacart or curbside pickup.
IPO specialist Renaissance Capital estimates that The Fresh Market could fetch up to $250 million in its IPO.
11. Databricks
Databricks, a software company founded by the creators of Apache Spark, helps big companies manage big data. Think machine learning and business analytics.
Since its inception in 2013, Databricks has acquired a customer base of more than 5,000 companies, such as Shell, HSBC, CVS Health and Comcast.
The company raised $1 billion in its latest funding round earlier this year. It’s now valued at $28 billion.
There’s no firm date on when to expect Databricks’ IPO, but observers believe it’s aiming to go public this year.
12. ThoughtSpot
Having founded two billion-dollar tech companies, ThoughtSpot founder Ajeet Singh may just be the Augur of AI.
His first company, Nutanix, a cloud infrastructure and services firm, was founded in 2009 and went public in 2016. But Singh had already moved on at that point to launch ThoughtSpot in 2012, based on a gut feeling about what was going to be the next big trend.
ThoughtSpot focuses on analytics and AI, creating a platform for organizations to set up sophisticated dashboards and find “hidden knowledge” pulled from various sources of data.
While you may not have heard of ThoughtSpot, you’ve probably heard of some of its big-name clients like Walmart, DeBeers, Hulu and OpenTable.
Onlookers expect ThoughtSpot’s IPO to happen this fall. The company was last valued at around $1.95 billion in 2019.
How to actually invest in an IPO
Who doesn’t love a good launch party? With a bunch of exciting companies looking to go public, this could be the year to finally take part.
Typically, buying into an IPO is reserved for Wall Street types and high-net-worth individuals. But one newly public company — you guessed it, Robinhood — is making it possible for regular investors to participate.
The company launched a feature called IPO Access in May. By partnering with investment banks, Robinhood is able to offer its users the chance to buy advance shares of certain companies at the IPO price.
Unfortunately, not every IPO is available on the platform, and you aren’t guaranteed to get a cut of the limited shares available.
If you’re wary of the hype around IPOs and the challenge of stock picking in general, you might be more comfortable using a robo-advisor to automatically build and balance a diversified portfolio. Some apps even allow you to invest using your “spare change” from everyday purchases.
