The IPO calendar was sparse in 2022, and things are only a bit busier in 2023. The bear market made many private companies rethink their plans to go public. With investor sentiment waxing negative for most of 2022, IPOs garnered only muted interest. This reduced the amount of cash that a private company could raise from selling shares to the public.
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The result was a terrible year for the IPO market. According to financial research company S&P Global (SPGI -0.6%), there were only 1,671 IPOs worldwide in 2022, half as many as in 2021. Money raised was less than $180 billion, down from $627 billion in 2021.
Nevertheless, the IPO market could be heating up again. While many private companies are delaying their IPO plans until the bear market eases, there have been a handful of exciting public offerings so far in 2023, with a couple more on the calendar for later in the year.
The IPO calendar for 2023
The IPO calendar for 2023 and beyond
Here are the top upcoming IPOs to keep an eye out for in 2023:
|Company||What they do||Projected IPO date|
|CAVA Group||Top Mediterannean-themed fast-casual restaurant chain.||June 15, 2023|
|ARM Holding||Top semiconductor design licensing company, currently a subsidiary of Japan's Softbank to be spun off as an independent entity.||In 2023|
|Discord||Communications app popular among video gamers but with growing adoption as a chat app among other users as well.||In 2023|
|Vinfast||An electric vehicle startup planning a U.S.-based factory.||In 2023|
|Instacart||A grocery ordering and delivery service that partners with physical stores.||In 2023|
|Popular social media site and public forum for making posts where content is promoted via user voting.||In 2023|
|Databricks||Cloud-based tool for collaborating on data management and analysis, also used in building AI applications.||To be determined|
|Stripe||Digital payments infrastructure and software leader that powers payments capabilities for merchants worldwide.||To be determined|
1. CAVA Group
1. CAVA Group
CAVA Group (CAVA -2.71%) is a fast-expanding fast-casual restaurant (think the same type of dining experience as Chipotle (CMG 0.4%)). CAVA has a Mediterranean flair, marketing the healthy lifestyle and simple fresh-ingredient cuisine of southern Europe, northern Africa, and the Middle East.
Over the summer of 2018, CAVA acquired another fast-casual Mediterranean fare chain, Zoe's Kitchen, which itself was a publicly traded stock at the time.
CAVA went public in June 2023 and nearly doubled from the IPO price when shares began trading on stock exchanges. Though CAVA is growing fast, it also loses money, making it a high-risk bet right now.
2. ARM Holding
2. ARM Holding
Following Intel's (INTC -1.04%) successful spinoff of its self-driving car subsidiary Mobileye (MBLY -2.36%) in 2022, ARM Holding could be the next semiconductor company to hit the public markets. Current owner Softbank (SFTB.Y -1.0%) purchased ARM in 2016 and is interested in a spinoff to raise cash.
ARM is a top licensor of chip designs -- counting mega-tech customers like Apple (AAPL -0.73%) as customers. Apple uses ARM to design silicon for its iPhone, as well as the M-series chips for its MacBooks. ARM was key to making mobile computing mainstream, but its energy-efficient chip designs are beginning to gain market share in the data center space as well. That could mean big opportunities for would-be shareholders of ARM in the next decade as the era of AI dawns on the global economy.
Chat and mobile communications start-up Discord gained millions of new users during the pandemic. Discord is a favorite among video game enthusiasts, but it has gained adoption for other uses as well. The company provides chat, voice, and video via private topic-based channels. It generates revenue via premium subscriptions, unlike other communications apps that make money from advertising.
Discord filed with the Securities and Exchange Commission (SEC) in 2021, but the bear market slowed plans for an IPO. Recent moves from the company suggest a 2023 IPO is possible. It has reportedly turned down several buyout offers, including from Microsoft (MSFT 0.07%) and Amazon (AMZN -1.71%). The company has also hired executives who have taken other tech companies public in recent years. Discord's last private funding round in late 2021 valued it at more than $15 billion, although that figure has almost certainly fallen as tech company valuations have been humbled by the bear market.
Revenue is a business’s gross income or the amount of money it brings in from regular operations before costs are considered.
Vinfast hopes to be the latest startup company to cash in on the electric vehicle (EV) trend. A part of Vingroup, Vietnam's largest business conglomerate, Vinfast is a subsidiary headquartered in Singapore. The company was eyeing an IPO in 2022 that would have valued Vinfast at more than $60 billion. However, EV startups and related stocks have been bludgeoned, so that valuation is unlikely to happen.
An IPO is still expected in 2023, though Vinfast's losses have reportedly steepened after a not-so-great start to deliveries of vehicles to the U.S. Early on, it appears there are serious concerns about vehicle quality, and recalls have been issued.
Vinfast would use the proceeds from an IPO to help build a new factory in the U.S. The company is offering two all-electric SUVs, which are currently available for reservation in the U.S. Production from a U.S. facility isn't expected to begin until at least 2024. Meanwhile, deliveries within Vietnam have begun in earnest. International deliveries (including to customers in the U.S.) from the Vietnam factory were in the early stages in the first half of 2023.
Vinfast is now expected to go public via a merger with SPAC (special purpose acquisition company) Black Spade Acquisition later in 2023.
Instacart quickly became a top e-commerce name early in the pandemic. The company partners with grocery stores, big-box retailers, pharmacies, and other brick-and-mortar stores to provide consumers with an online shopping experience and same-day home delivery service.
The company's growth skyrocketed in recent years, but market turmoil and high inflation reportedly led to slashed valuations for Instacart. A recent estimate pegged the company's value at about $13 billion in May 2023 -- down nearly 70% from its peak valuation in early 2022. As a result, Instacart is reportedly slashing expenses in preparation for an IPO sometime this year.
In late 2021, social media and public forum Reddit filed for an IPO with the SEC. It was reportedly tapping Wall Street banker Goldman Sachs (GS -1.87%) in its efforts to go public and was seeking a total valuation of $15 billion. The market sell-off in 2022 slowed its IPO plans down, though, and likely lowered Reddit's valuation. A go-public date has yet to be determined, though the company is eyeing a second-half 2023 IPO.
Reddit hosts well over 100,000 active subreddits and content is created and voted on by users. The company makes money via a combination of advertising and an ad-free premium subscription. Reddit picked up millions of new users in 2020 and 2021.
However, as it prepares for an IPO, the company is trying to show it can be profitable. It laid off some of its staff. And in a particularly controversial move, it said it would begin charging high fees for its API -- a bit of code developers use to embed Reddit or Reddit data into their apps. Many developers have been protesting, saying the high fees would kill their work.
Databricks might have missed the tech IPO boom of 2020 and 2021, but an IPO is still reportedly in the works. The company provides a cloud-based platform for data scientists and analysts to collaborate on digital information warehousing and work on artificial intelligence (AI) applications.
Over the summer of 2021, Databricks was valued at some $38 billion after raising $1.6 billion during a private funding round. Like other tech companies, that valuation has taken a big hit. Nevertheless, the company said in August 2022 that it now brings in more than $1 billion in annual recurring revenue from subscribers. An IPO date hasn’t been set yet. Given the beating tech stocks took last year, plans to go public were likely delayed until market sentiment improves. Perhaps 2023 will be the right time.
Stripe is a leader in payment processing services. The company claims that millions of companies all over the world use its platform for processing digital payments. Stripe integrates with e-commerce payment systems such as Shopify (SHOP -1.08%), helps with payment acceptance from card networks such as Visa (V -0.95%), and even integrates with a variety of cryptocurrency marketplaces. The company also provides tools to help merchants and businesses detect and prevent financial fraud, has software for financial and tax reporting, and helps banks offer digital products to customers.
Stripe registered its intent to have an IPO with the SEC in 2021. However, details for the IPO and a date have yet to be set, and the company is reportedly still determining whether a 2023 public offering is prudent. The bear market has certainly affected Stripe’s plans.
Due to its large size, some investors are speculating that a Stripe IPO might occur as a direct listing (where no new money is raised for the company) rather than a traditional IPO. And hit by macroeconomic issues, the company recently raised $4 billion from investors in a private funding round. Estimates point to Stripe’s market cap falling from a peak of $95 billion to $50 billion.
Related investing topics
Investing in IPO stocks
Investing in IPO stocks
Investing in IPOs can be risky. This isn’t simply because many IPOs can be richly valued tech stocks. Take Porsche, part of German automaker conglomerate Volkswagen. At the end of September 2022, Volkswagen spun off 25% of its equity stake in Porsche and raised 9 billion euros (about $8.8 billion). Volkswagen returned 49% of proceeds to shareholders via a special dividend in early 2023.
As for Porsche, the company reported it brought in 17.9 billion euros (about $17.5 billion) in sales during the first half of 2022 and generated an operating profit margin of 19.4%. But despite solid performance and optimism that Porsche’s mix of luxury sports cars and EVs will provide steady growth for years, shares still fell below the IPO price in the days following the initial public offering. (Note to retail investors: Beware before swooping in to buy a hyped IPO stock.)
The IPO calendar in 2023 could feature some hot companies out there looking to go public. Some of these businesses have exciting potential. However, be careful before jumping in. IPO stocks can be risky, especially during the first year or two after the company goes public. Companies that have an IPO to raise cash may need that money in an attempt to stabilize their business or to fund aggressive expansion plans. Employees and early investors often sell in the first year or two after a hot IPO, which can also lower stock prices if too many big shareholders sell within a short period of time.
Oftentimes it pays to wait before buying a fresh IPO.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo has positions in Amazon.com, Apple, Shopify, and Visa. The Motley Fool has positions in and recommends Amazon.com, Apple, Chipotle Mexican Grill, Goldman Sachs Group, Microsoft, S&P Global, Shopify, and Visa. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel and long January 2025 $45 calls on Intel. The Motley Fool has a disclosure policy.