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EARLY INVESTORS
In 2021, IPOs in the United Kingdom and Europe have gotten off to a good
start, boosted primarily by companies that thrived during the lockdown, such
as online digital rms and gamer stocks.
FACTS TO REMEMBER
Despite concerns that the UK IPO market will suffer as a result of Brexit and
lose listings to EU exchanges, the London Stock Exchange led the way, listing
four new IPOs and two in its Alternative Investment Market (AIM) submarket.
The IPO market in the United States has also exploded this year, with a total
of $22.6 billion in deals so far.
“We have witnessed some tectonic shifts in the ecommerce landscape as a result
of Covid — things we thought would take ve years have taken ve months,”
BACKGROUND
The emergence of a slew of tech and digital firms raises expectations that
Europe will be able to better compete with the United States, which has
long dominated these fields. According to Barry Meyers, head of UK equity
capital markets at JPMorgan, “Europe has had a shortage of these tech
companies [compared with] the US in recent years ” adding, "there is
enthusiasm at the moment because these are high-quality companies.”
SPACs, which are created to raise capital through an IPO for the purpose of
purchasing an established business, have played a significant role in US
IPOs and are now gaining traction in Europe as well. German venture capital
rm Lakestar, an early backer of digital music rm Spotify Technology, is
reportedly seeking up to $484 million in a SPAC listing in Frankfurt this year.
The business, which was established in 2013, has 44 offices around the
world and employs over 1200 people.
EG GROUP (EST MARKET CAP: £10 BILLION)
Trustpilot, a review website, is another IPO that could happen in 2021. If the
company can maintain its optimistic revenue gure of at least £76 million, it
could fetch a value of more than £770 million. Clients that subscribe to
Trustpilot's online services account for the majority of the company's sales.
Since 2011, McLaren Group, a British Formula One team and sports car
manufacturer, has been linked to an IPO.
In 2019, McLaren Group's CEO said that an IPO could not take place before
2021. Since the market for automakers was extremely volatile, with Brexit
affecting supply chains and the trade war increasing the cost of doing
business, this was the case. Now that Covid-19 has wreaked havoc on the
markets, the plans could be further delayed.
Jaguar Land Rover (JLR) is a subsidiary of India's Tata Motors and has been
rumoured to be considering an initial public offering (IPO) for some time.
The largest cinema chain based in the United Kingdom is Vue International.
It operates 286 cinemas in the United Kingdom, Italy, Poland, Germany,
Ireland, and Latvia. After figuring out a way to cash in on its savings while
keeping the company private, it was able to postpone its rumoured 2018
IPO.
Proof of Trust has announced that it intends to list on the London Stock
Exchange in order to boost its profile and attract investment in order to
compete on a global scale – something that it claims tech companies
depend heavily on. The business announced its plan to list on the stock
exchange on June 30, 2020, with more details to come later in the year.
Many people are looking forward to a TikTok IPO in 2021, after the mega-
popular app was valued at $50 billion in July 2020. The exact date of the IPO
is uncertain, but we do know that TikTok Global will be listed on the stock
exchange. ByteDance will own 80% of the company ahead of the IPO, while
Oracle and Walmart will own 20% and 20%.
Even though it launched years later, TikTok is now larger than social
competitor Snap Inc. Investor interest is expected to be high if the TikTok
Global IPO goes off without a hitch.
After its parent company, SpaceX, hinted at plans for an IPO in the future,
rumours of a Starlink IPO emerged in 2019. Elon Musk, on the other hand,
dismissed the rumours in March 2020, saying that SpaceX was
concentrating on other targets, such as creating a colony on Mars.
Starlink is a satellite network that aims to provide high-speed global
internet connectivity.
Instacart is a grocery delivery service that was created in 2012 and is now
valued at about $13.7 billion following its most recent round of funding in
June 2020. Whole Foods, one of the most important partners, was
purchased by Amazon a few years ago, making some people concerned
about the company's future.
Instacart, on the other hand, has expanded to serve 15,000 stores in 400
locations throughout the United States and Canada. The scale of its
footprint across North America attests to its continued growth, despite the
fact that it does not report its sales or profits.
Any IPO will be part of a larger strategy to transform the business into a full-
service financial services firm over the next few years. Obtaining investor
support, particularly given the high level of scepticism surrounding
cryptocurrency trading, may be the most difficult obstacle to preparing the
company for a public listing.
Robinhood raised $200 million from D1 Capital Partners in its most recent
round of funding (series G), which the company announced in August 2020.
This comes after a new round of fundraising in July 2020, which raised $320
million.
EAZE (EST MARKET CAP: $500 MILLION)
Since 2018, there has been a lot of talk about an Eaze IPO, but the
marijuana distribution service does not go public until the end of 2020. Of
course, the possibility has piqued the interest of traders and investors,
particularly in light of the cannabis industry's rapid growth over the last
three years.
Eaze expected $1 billion in sales by 2020, but it is still struggling to hit $500
million in transactional value. This could affect the IPO's launch date as well
as its final valuation. Eaze's long-term sustainability will be determined by its
ability to adapt to the rapidly evolving cannabis and tech environment.
In 2021, Vodafone plans to move the majority of its cell towers to a new
company called Vantage Towers. This is part of its strategy to monetize its
68,000 towers at the start of the 5G period.
Vodafone could make billions from the IPO, which would help it pay off its
debt. Although the company hasn't revealed anything about the IPO, it has
reported that the market cap of Vantage Towers will not surpass €10 billion
when it goes public.
However, in July 2020, it was reported that the company may forego an
International listing in favour of listing its Chinese operations on a Hong
Kong or Shanghai exchange. It's unclear how this would affect the
company's valuation until it goes public.
In 2020, the company plans to launch an initial public offering (IPO) worth
between ₹10 billion and ₹12 billion (roughly £105 million and £125 million),
with the proceeds to be used to open new restaurants, repay debts, and
finance general operations. The stock is expected to trade at a price of ₹5.
1. Hut Group
2. Palantir
3. Snowflake
4. Asana
5. JDE Peet's
HUT GROUP (MARKET CAP: £5.4 BILLION )
Hut Group is a retail and technology company that declared its intention to
list on the London Stock Exchange in August 2020, and went public on
September 21, 2020. At launch, the company aimed for a market
capitalization of £4.5 billion, but it soared beyond expectations, closing at a
value of nearly a billion pounds more (£5.4 billion).
The stock was listed at $10, which was higher than the NYSE's reference
price of $7.25 per share. The company's market cap was reduced to $16
billion, less than the expected market cap of $20 billion.
Snowflake had sold 28 million shares for $120 each the day before the IPO.
The IPO price was higher than the target range of $100 to $110 per share.
In the 12 to 18 months leading up to the IPO, the company had been doing
well.
ASANA (MARKET CAP: $4 BILLION)
Asana, a project management software firm, has chosen to list on the NYSE
directly in September 2020, on the same day as Palantir. Since shares
floated at $27, it was valued at $4 billion. Asana is one of the businesses
that benefited from the Covid-19 lockdown, which forced employees to
operate from home.
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