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2021 IPO draft class
American Middle Class

2021 IPO DRAFT CLASS: Ranking the Top 10 Prospects

2021 IPO draft class is packed with companies with excellent business models.  When the calendar switched from 2019 to 2020 last year, just a handful of people heard of Zoom, let alone use it.  Zoom was one of the most successful initial public offerings (IPO) in  2020, making its founder, Eric Yuan, one of the world’s wealthiest individuals.

When the whole world ground to a halt at the end of the first quarter of 2020 due to the novel coronavirus,  the video communications company came to the rescue. All of a sudden, we were having Zoom weddings, baby showers, and funerals.  

Nearly 500 companies started selling their shares to the public for the first time in 2020.  Numerous companies are gearing up to go public next year.  Is there a “Zoom”  amongst them?  Below are the top ten anticipated IPOs in 2021.

10 Major Upcoming IPOs to Watch in 2021

  1. Robinhood

Robinhood, the popular trading platform, first raised money in 2014.  The company raised 13 million dollars during its Series A funding.  During its extended round G funding, Robinhood raised $600 million.   The financial services company valued at $11.7 billion at the time. 

Companies don’t go public to create publicity, brand awareness, or prestige.  They go public when they are no longer able to raise capital in the private markets or when their early backers start putting pressure on them to do so.

At a most recent valuation of  $11.7 billion,  early backers such as Ribbit Capital, Index Ventures, and Slow Ventures might want to cash out.  

Despite the latest complaint filed by Massachusetts securities regulators against the company for misleading investors, a Robinhood 2021 IPO is somewhat inevitable. The question is, will the secondary market welcome its IPO as much as they welcome its game-like trading App?

Notable Investors:

  • D1 Capital Partners
  • Andreessen Horowitz
  • Ribbit Capital
  • Sequoia Capital
  • DST Global
  1. Instacart

Instacart, the leader in online grocery, had seen its valuation more than double in 2020.  The company’s latest round of funding values it at $17.7 billion.  The private markets were as bullish as the secondary market last year.

Instacart was founded in 2012, and it has already raised $2.4 billion in total funding.  Even in the era of cheap money, Instacart is due for a 2021 IPO.

Notable Investors:

  • T. Rowe Price
  • D1 Capital Partners
  • Tiger Global Management
  • DST Global
  • Valiant Capital Partners
  1. Roblox

Roblox, the online game platform and game creation company, closed a new round of funding last February, which valued the company at $4 billion.  

It raised $150 million during the Series G round of funding, bringing Roblox’s total funding to $335.7 million.

Roblox updated its IPO prospectus with serious plans to go public last month, but the IPO was postponed to 2021.  Altos  Ventures and  Meritech are existing investors that participated in the latest round.  

Notable Investors:

  • Tencent Holdings
  • Andreessen Horowitz
  • Mitech Capital Partners
  • Altos Ventures
  • Tiger Global Management
  1. Coinbase

Coinbase Global Inc is a digital currency exchange founded in 2012.  The bitcoin-focused company confidentially filed a draft registration with the Security Exchange Commission mid-December detailing its intention to start selling shares to the public.

Coinbase is a cryptocurrency exchange, and Bitcoin is a cryptocurrency, but they are interwoven.  Coinbase gives digital currency buyers and sellers a safe place to custody their wallets.  

The meteoric rise of Bitcoin last year is an excellent indicator that a Coinbase IPO might fare well in the public market.  The company executives will make sure to emphasize that fact during the roadshow.  

The digital currency’s value has tripled in about one year. On January 2, 2020, Bitcoin topped $7,212.  As of this writing, it tops $33,000

During its seed-round in September 2012,  Coinbase raised $600,000.  It raised $300 million in 2018, which valued the company at nearly  $8 billion.  The company has raised a total of $547.3 million.

Coinbase is the largest U.S.-based cryptocurrency exchange, so its IPO and business model’s success will depend on cryptos’ future stability.

Notable Investors:

  • Andreessen Horowitz
  • Tiger Global Management
  • Manhattan Ventures Partners
  • True Capital Management
  • Y Combinator
  1. Petco

Petco Health and Wellness Company, Inc will be publicly traded again early this year. The pet retailer was last publicly traded in 2006

In the S-1 Form, which they filed last month,  their net sales increased from $3.29 billion to $3.58 billion, representing period-over-period growth of 9.0% for the first thirty-nine weeks of Fiscal 2020

When the private equity firms CVC Capital Partners and Canadian Pension Plan Investment Board acquired the company, they paid  $4.6 billion. Investors will have to wait and see how much the company will price its IPO.  

Chewy, the online business of Petsmart, went public on June 14, 2019, at $22 per share.

Notable Investors:

  • CVC Capital Partners
  • Canadian Pension Plan Investment Board
  1. Stripe 

According to Bloomberg, the financial-technology company was in talks for funding at a $70 billion valuation or more back in November.  

Stripe has already raised $1.7 billion since the two Irish brothers John and Patrick Collison founded Stripe in 2010.  The firm’s latest round of funding  was back in April when it raised $600 million at a valuation of $36 billion

With more than 2,500 employees, dozen-plus global offices, and numerous high profile clients, Stripe is no longer a payments startup company.   

Moreover, the fintech company’s seed and Series A rounds were nearly ten years ago. Its early venture-capital firms, Sequoia Capital, General Catalyst, and Andreessen Horowitz,  might be ready to cash in.  

Notable Investors:

  • General Catalyst
  • Andreessen Horowitz
  • Sequoia Capital
  • DST Global
  • Tiger Global Management
  1. Nextdoor

Nextdoor Inc is a hyperlocal social network company that connects neighbors and everything nearby: Local businesses, services, news updates, recommendations, and stuff for sale from the people down the block.

The social network company raised $123 million in May 2019 at a valuation of $2 billion.  Nextdoor was founded in 2008.  It has already raised $425 million in funding over the nine rounds, with the Series A round back in 2012.

The neighborhood-based social networking company claims on its website that it operates in eleven-plus countries,  has more than 270,000 neighborhoods globally, and has more than 50 million local business recommendations from neighbors. 

The firm has not raised money since 2019.  A likely sign that the existing VC firms Benchmark, Tiger Global Management, and Kleiner Perkins might want an IPO sooner than later.

Notable Investors:

  • Kleiner Perkings
  • Meyer Equity
  • Benchmark
  • Riverwood Capital
  • Tiger Global Management
  1. Rivian

Rivian is Tesla’s rival.  For most investors, that’s all they need to hear to be excited about the automaker and automotive technology company’s potential IPO next year.

The electric pickup-truck startup has already raised money from gigantic organizations such as  Amazon, Ford,  Cox Enterprises,  Fidelity Investments, and more.

The company raised $2.5 billion back in July.  According to Crunchbase,  Rivian has raised a total of $5.6 billion in funding over eight rounds.

Rivian does not have a drivable vehicle available to the public; its electric pickup and R1S SUV are expected to go on sale early next year.

Notable Investors:

  • Fidelity Management and Research Company
  • BlackRock
  • Amazon 
  • Soros Fund Management
  • Ford Motor Company 
  1. Impossible Foods

Meatless-burger company Impossible Foods Inc might too go public this year.  Fast foods and fast-casual restaurants added vegetarian-friendly products to their menu a few years ago.  However, McDonald’s Corp, the multinational company, has not added meat alternatives to its U.S. menu as of yet.  The world’s number one fast-food chain did say that it will create McPlant, which will compete with Impossible Foods Inc and Beyond Meats. 

The private markets have bought into the company business model.  The company raised a total of $1.4B in funding over 13 rounds so far.  They raised $200 million during their latest round of funding back in August.

Beyond Meats, one of Impossible Foods Inc’s direct competitors went public in May 2020.  Its have quadrupled from its May initial public offering price.  As of this writing, Beyond Meats has a market capitalization or market cap of $7.832 billion. 

Notable Investors:

  • Serena Williams
  • Bill Gates
  • Katy Perry
  • Temasek Holdings
  • Coatue
  1. Starlink

SpaceX’s Starlink,  the internet connection services subsidiary, might be a standalone publicly-traded company by the end of 2021. 

The spinoff firm will aim to provide high-speed internet access across the globe.  The United States, the world’s most powerful country, has a very slow internet speed. 

America holds the 11th position in internet speed globally, with South Korea, holds the first spot. The average internet speed in America is 14.2 megabit per second (Mbps). The average Mbps is 26.7 in South Korea.  

The globe has a genuine need for fast and affordable internet service.  SpaceX’s Starlink has nearly 800 Starlink satellites in orbit right now, with the plan to have 12,000. There seems to be a sustainable and scalable business model for the company if SpaceX decides to spin it off.

SpaceX has been raising capital specifically for the project, which could cost up to $10 billion.  The firm has raised a total of $5.4B in funding over 35 rounds. 

Notable Investors:

  • NASA
  • Meyer Equity
  • Legendary Ventures
  • Ontario Teachers’ Pension
  • Bennett Capital Co.

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