A Wave of Tech IPOs Is Coming Before the End of the Year
A number of high-profile tech companies are planning to go public before the end of the year. Big names like Airbnb and DoorDash will likely make their filings public in the next week. Wish, an ecommerce company specializing in unique discount nik naks, and Roblox, a kid-focused gaming company, are also expected to announce their filings imminently.
Each of the four companies confidentially filed paperwork with the SEC earlier this year. The pandemic has accelerated certain parts of the IPO process. Before the pandemic, companies would embark on a roadshow, visiting investors across the country and giving in-person presentations before their public debuts. Now this process is entirely virtual, and it takes a matter of days, not weeks, which speeds up the entire process of a company going public.
Conditions are also favorable for tech IPOs at the moment, and the four companies want to push ahead with their debuts in case circumstances change.
Airbnb’s Roller Coaster Year
Airbnb, the biggest name planning to go public in the coming months, has had a roller coaster year. The home rental company was planning to go public earlier in 2020, but when the pandemic shut down the travel industry, Airbnb faced significant financial strain. The startup slashed 1,900 jobs, about 25% of its workforce. It raised $2 billion in high-interest debt to stay afloat, and its value dropped by about 16% to $26 billion.
Despite these initial struggles, Airbnb has made an impressive comeback, taking advantage of consumers looking to work remotely in new locations. The company earned more than $200 million in June—a 25% increase compared to the same month a year prior.
DoorDash, Roblox, and Wish Help Customers Navigate the Pandemic
DoorDash, which is valued at $16 billion, has seen demand for its services surge during the pandemic. The company has also captured more market share recently, accounting for 49% of US meal delivery sales in September. That is more than twice Uber Eats’ (UBER) market share.
The pandemic has also led to booming demand for Roblox’s games as parents look for ways to entertain their kids during school closures and lockdowns. Through its IPO, Roblox expects to double its $4 billion valuation. Wish, valued at $11.2 billion, has also witnessed surging demand for its ecommerce services during the pandemic. The company currently has about 70 million active users.
2020 has already been a significant year for tech IPOs, with Snowflake (SNOW), Unity (U), and others making their debuts. Palantir (PLTR) and Asana (ASAN) also began trading via direct listings. The wave of companies going public is not over yet, and investors will be eager to see how four important IPOs unfold heading toward the end of the year.
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