As the year draws to a close, the annual ritual of initial public offering (IPO) predictions unfolds, and at EquityZen we are casting our predictions on the companies we expect to hit the public stage in the coming year. Before we start, let's look back on 2023. The extraordinary upswing in global IPO activity witnessed in 2021 featuring 2,388 companies, came to be recognized as an anomalous occurrence. John Chirico, Citi's US Head of Banking, Capital Markets, and Advisory, describes the exuberance of 2021 as an outlier, recognizing the consequential challenges it brought. In contrast, 2023 has seen 968 companies go public so far, marking a decrease from 2022’s full year numbers (1,333 IPOs) and a significant departure from the deals of 2021.
When reviewing our IPO predictions for 2023, we see a mixed outcome - both some hits, and some misses. ARM Holdings and Vinfast both made their public debuts as anticipated, with ARM entering the market in September as one of the biggest offerings of the year and Vinfast going public via the Black Spade SPAC. On the flip side, Navan (formerly known as Tripactions) and Reddit declared their IPO intentions but have yet to make the leap, positioning them as potential candidates for 2024. Meanwhile, Clarios and ezCateropted out of discussions on public offerings.
While we saw an uptick in IPO activity with Instacart’s long-awaited IPO alongside ARM, Klayvio and Birkenstock, the lackluster performance of these IPOs wasn’t enough to encourage more private companies to follow. We will enter 2024 with over 1,200 unicorn companies globally, worth an aggregate $3.8T. The need to provide liquidity to early shareholders and enable broader investment access to these growing companies should spur IPO activity, if the market environment is suitable.
Looking forward, the consensus within financial circles suggests a shift towards more stable market conditions reminiscent of the comparatively tranquil years of 2018 and 2019. Many foresee continued job growth, strong GDP, dampened inflation and potentially even rate cuts. However, a crucial caveat accompanies this vision — the necessity of political and economic stability for such a market environment to materialize. With ongoing geopolitical risks and an election year in sight, the market will still see its fair share of volatility.
With all this in mind, what can we expect for the IPO market in 2024?
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2024 IPO Candidates
A more stable market could provide a supportive environment for companies aiming to go public next year, allowing both retail and institutional investors in the public markets to gain access to more promising companies in which to invest. As we eagerly await the kickoff of the much-anticipated 2024 IPO season, a wide array of companies across various industries are gearing up to step into the spotlight. Notably, the standout candidates lean towards consumer-centric businesses, a departure from the usual emphasis on technology. Let's take a closer look at these contenders:
- In the competitive realm of licensed sportswear and sports betting, Fanatics, Inc., under the leadership of CEO Michael Rubin, signaled its intent to go public in the coming years. The recent appointment of Andrew Low Ah Kee as CEO of Fanatics Commerce underscores a strategic management transition ahead of a potential IPO. With a valuation of $31 billion in December 2022, Fanatics is positioned to leverage its diverse offerings, spanning sports collectibles, NFTs, trading cards, and sports merchandise, offering investors a unique opportunity to tap into the lucrative sports merchandising market.
- Liquid Death, the distinctive canned water company founded by Mike Cessario, has garnered attention with its unconventional "murder your thirst" branding. With a reported valuation of $700 million after a $70 million financing round led by Science Ventures, the company is contemplating an IPO in 2024. The strategic recruitment of ex-White Claw executive Stephen Ballard as Chief Commercial Officer signals a calculated move to stimulate sales growth and access new markets, adding an attractive layer to its investment proposition.
- Reddit, is a social media platform and online community, is one of the main candidates for an IPO in 2024. In August 2021, Reddit secured a hefty $10 billion valuation in a private fundraising round. Now eyeing an IPO, the platform initially hoped for a valuation north of $15 billion. The final valuation is still up in the air, adding a dash of anticipation to Reddit's upcoming public debut.
- ServiceTitan, a software company catering to service industries such as HVAC and plumbing, initially slated for a 2022 IPO at an $18 billion valuation, maintains its allure as a potential candidate in 2024. With its last official valuation at $9.5 billion in June 2021 and a comprehensive suite of services, including dispatching, marketing, and payroll solutions, ServiceTitan presents an interesting investment proposition in the ever-evolving software-as-a-service investor, one of the more popular industries amongst EquityZen investors.
- Shein, the Singapore-based online fast fashion retailer, has quietly initiated the IPO process, eyeing a remarkable $90 billion valuation. Established in China in 2008, the company, led by entrepreneur Chris Xu, became one of the world's largest fast fashion retailers in 2022, presenting an interesting opportunity as it ventures into the public market.
- Skims, the shapewear and clothing company co-founded by Kim Kardashian, Emma Grede, and Jens Grede, stands out with a valuation exceeding $4 billion, a testament to its success in promoting body positivity and inclusivity. Following a substantial $270 million funding round and the strategic addition of CFO Andy Muir, formerly associated with Nike, Skims strategically positions itself for a potential IPO, showcasing its allure in a bullish market environment. It’s worth noting that a Skims IPO would buck the trend of companies waiting longer to IPO. Founded in 2019, Skims would be a mere 5 years old in 2024.
- Swiggy, the Indian online food ordering and delivery platform, is also a contender. Poised for a 2024 IPO with a projected valuation of $1 billion, Swiggy, backed by SoftBank, emerges as a key player in the global tech investment landscape. The potential reduction of SoftBank's 9% stake, valued at over $800 million, underscores the significance of the upcoming IPO, presenting investors with a unique opportunity to participate in the transformative growth of the global food delivery market.
- In the proptech sector, companies such as VTS, and Roofstock emerge as potential contenders for IPOs in 2024, according to Clelia Warburg Peters, Managing Partner at Era Ventures. According to Warburg Peters, these companies, having secured substantial capital in 2021, are strategically positioned to navigate challenges in the real estate market and capitalize on the increasing role of technology in the industry, providing investors with an attractive entry point into the evolving proptech landscape.
These companies, each with its own blend of innovation, market leadership, and strategic vision, collectively offer a captivating investment opportunity for public market investors.
Within the private markets, popular startups amongst investors share several commonalities: a focus on transformative technologies like artificial intelligence (AI) and a commitment to user-centered design. These companies often disrupt their industries, showcasing impressive growth metrics and a keen eye on profitability. Our recent list of emerging private companies highlights these very characteristics.
As we prepare for 2024, the IPO market promises not just investment opportunities but a front-row seat to the evolution of industries and the potential for transformative growth. The stage is set, and the anticipation is high – let’s see where 2024 takes us!
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