Tech companies are lining up to go public and you’ll want to keep a close eye on the next wave of initial public offerings hitting Wall Street. The IPO market is heating up and the tech sector in particular is poised for massive growth. Some of the most exciting privately-held tech startups are preparing to launch initial public offerings in the coming months. You’ll have the opportunity to get in on the ground floor of the next generation of tech unicorns.
The companies on this list have dominated their markets and are ready to take the next step to becoming publicly traded companies. They have proven business models, strong leadership, and a clear path to continue their growth at a staggering pace. While there is always risk in any investment, the companies featured in this article have demonstrated the ability to revolutionize their industries and generate substantial returns. The next big tech companies are ready to emerge and you have the inside track to get in early. These tech IPOs represent a chance to find the next Amazon, Google, or Facebook. The future tech unicorns are here, and the time to invest is now.
The Tech IPO Frenzy: Why Now Is the Time
The technology sector is poised for a surge of initial public offerings (IPOs) this quarter, giving investors a chance to get in on the ground floor of the next generation of tech unicorns.
The IPO market as a whole has been red-hot, with 2020 posting the highest
IPO proceeds in over two decades. Tech IPOs have led the charge, raising $67.7 billion last year. Now a slate of private tech companies are preparing to go public, hoping to take advantage of voracious investor appetite for growth stocks.
Among the most anticipated listings are cryptocurrency exchange Coinbase, delivery service DoorDash, and software maker Anthropic. Their IPOs could produce massive returns if they are warmly received. For example, DoorDash’s last private market valuation was over $16 billion; if it achieves a typical tech company multiple upon IPO, it could be valued at $25 billion or more, generating solid gains for early investors.
The time is ripe for these tech companies to pursue public listings. Interest rates remain near historic lows, fueling demand for risky, high-growth stocks. And with people spending more time online during the pandemic, tech companies have seen usage and revenue surge. An IPO lets them raise additional capital to fund expansion plans while also providing a lucrative exit for early backers.
For investors, these new listings present an opportunity to get exposure to some of the fastest-growing tech companies at an early stage of their development. However, the risks are real, too, if growth slows post-pandemic or companies stumble in their efforts to generate profits. By properly assessing both the upside potential and downside risks of these tech IPOs, investors can determine if now is the right time to buy into the next generation of tech leaders.
Top 5 Tech Companies Expected to Go Public This Quarter
If you’re an investor looking for the next big tech companies to go public, the final quarter of this year promises massive returns. The following top 10 tech companies are expected to have initial public offerings (IPOs) this quarter:
Cloudreach
This cloud computing services provider, based in London, is preparing for a $3.5 billion IPO. Founded in 2009, Cloudreach has over 1,500 employees across Europe, APAC, and North America, providing managed public cloud services for AWS and Azure platforms. They are expected to begin trading on the NYSE.
DataRobot
The Boston-based AI and machine learning company has been valued at $6.3 billion and is planning to raise $500 million in its upcoming IPO.
DataRobot’s automated machine learning platform is used by over 40% of the Fortune 500 to build and deploy ML models. They intend to list on Nasdaq under the ticker symbol DROB.
Instacart
The grocery delivery service Instacart has grown exponentially during the pandemic and is now valued at $39 billion. As the leader in same-day grocery delivery across North America, Instacart’s IPO is highly anticipated. They aim to raise $200-$300 million in their Nasdaq listing this quarter, which would make them one of the biggest tech IPOs of 2021.
Zapata Computing
Zapata Computing is a Boston-based quantum software company founded in 2017. The startup builds software platforms and applications for quantum computers, including a quantum operating system and development environment for programmers. As quantum computers continue to advance rapidly, the need for robust software and applications is becoming increasingly important. Zapata is well-positioned to provide essential infrastructure for the quantum computing industry. Following an $8 million seed round, Zapata’s IPO could yield major returns for investors.
Anthropic
Anthropic is an artificial intelligence safety startup based in San Francisco. Founded in 2021, the company is focused on developing AI systems that are aligned with human values and priorities. Anthropic could prove vital in ensuring the responsible development of advanced AI technologies like artificial general intelligence. With $8 million in seed funding and a team of leading experts in AI safety, Anthropic is poised for massive growth following its IPO.
Anthropic is working to build AI systems with human-aligned values and priorities. The San Francisco startup was founded in 2021 by experts in AI safety seeking to ensure the responsible development of advanced technologies like artificial general intelligence. With $8 million in seed funding and leading experts in AI safety, Anthropic shows strong potential for growth following its initial public offering this quarter. Investors would be wise to monitor Anthropic closely in the coming months.
The tech IPO market is poised to heat up this quarter. Keep a close eye on Anthropic, Zapata Computing, and Anthropic as they prepare to go public. These startups are building essential technologies and infrastructure for some of the fastest-growing industries today, and their IPOs may represent a chance to get in on the ground floor of the next generation of tech unicorns.
What to Look for When Investing in Tech IPOs
When investing in tech IPOs, several factors are important to consider to maximize your returns and mitigate risks.
Business Model and Revenue Streams
Look for companies with a solid, sustainable business model and multiple revenue streams. Dependence on a single product, service or customer base is risky. Diversified, recurring revenue from subscriptions, licenses, ads, etc. is ideal. Consider how much of the revenue comes from new vs. existing customers.
Market Opportunity
Evaluate the size of the potential market the company is targeting and their ability to capture a meaningful share of it. A large, fast-growing market with few dominant players provides more opportunity for gains. How much market share can the company capture over the next 3-5 years based on their product, team, partnerships, etc.? What barriers to entry exist for competitors?
Management Team
A visionary, experienced management team with a track record of success is key. Evaluate the backgrounds of the CEO, CTO, and other key executives. Have they founded and scaled successful startups before? Do they have relevant industry experience? Consider how long the team has worked together. More cohesive teams often outperform.
Financials
Review the company’s financial statements to determine if revenue and income growth is accelerating. Look for improving margins, decreasing costs, and sustainable free cash flow. Make sure the valuation and share price at IPO seem reasonable based on their financials and growth projections. Overvalued IPOs often see sharp share price declines once public trading begins.
Competitive Advantage
Determine what gives the company a competitive edge. Things like proprietary technology, data access, partnerships, network effects, and intellectual property can provide an advantage. How sustainable is their competitive edge? Can competitors easily replicate it? The longer a competitive advantage lasts, the more opportunity for gains.
Considering these key factors carefully when evaluating tech IPOs can help you invest in the most promising companies poised for success. While risks always remain, looking for sustainable business models, large market opportunities, visionary management, accelerating financials, and durable competitive advantages will put the odds of significant returns in your favor.
How to Get Early Access to Hot New Listings
To gain early access to hot new tech IPOs, you’ll need to take some proactive steps. Many newly public companies initially reserve a portion of shares for institutional investors and high-net-worth individuals. However, through brokerages and certain investment platforms, you may be able to buy in at the initial offer price.
Open a Brokerage Account
Establish an account with a major online broker that participates in IPOs, such as E*Trade, TD Ameritrade, or Charles Schwab. These brokerages will notify you of upcoming IPOs and may provide the opportunity to indicate your interest in shares before the offering. Meet their minimum account balance to qualify for IPO participation.
Build a Relationship
Cultivate a relationship with a broker or investment advisor at your chosen firm. Let them know you’re interested in tech IPOs and new issues. They can alert you to deals that may not be broadly advertised and help you get in on the ground floor. Be prepared to move quickly, as hot IPO shares are often in high demand.
Look for Alternative Routes
Some investment platforms like EquityZen and Forge Global offer secondary marketplaces where you can buy pre-IPO shares from employees and early investors. You may be able to get shares at a lower cost basis before the company goes public. However, these private marketplaces can be riskier, and there’s no guarantee an IPO will actually happen.
Set Price Alerts
Once an IPO is announced, set a price alert with your broker to notify you if the stock hits your target entry point. That way you can act fast to put in an order as soon as shares become available at an attractive price. Monitor the stock for the first few days of trading to see if it pulls back, which often happens, before committing capital.
With some advance planning and quick action, you can gain access to the next generation of tech superstars and potentially generate high returns over the long run. While risky, tech IPOs offer the possibility of getting in on the ground floor of innovative companies that could become the next Amazon or Google.
Predicting the Next Tech Unicorns: 3 Companies to Watch Closely
Of the tech companies planning an IPO this quarter, three show particular promise to become the next “unicorns”— private companies valued at over $1 billion. Closely monitor these companies in the coming months as they prepare to go public.
Conclusion
You’ve now seen the 10 tech companies poised to go public in the coming months with the potential for massive returns. While not every company achieves the coveted ‘unicorn’ status with a $1 billion-plus valuation, some on this list have the innovative ideas, scalable business models, and talented leadership to reach that milestone. As an investor, the key is getting in on the ground floor before the IPO and riding the wave of growth. The companies that become the next tech unicorns will shape the future of how we live and work. Keep a close eye on these up-and-coming players – some may just transform the world and make early investors very wealthy in the process. The future is being built today, so choose your horses and enjoy the race.
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