San Diego Union-Tribune (Sunday)
YEAR-END TECH IPO BOOM
As 2020 comes to a close, investors will likely see new company IPOS from Doordash, Affirm, Wish and Airbnb.
As Airbnb and Doordash prepare for long-awaited stock market debut, other consumer-facing technology companies are joining the going-public party, which had been dominated so far this year by enterprise software listings.
Food-delivery service Doordash on Friday filed papers signaling its intent for initial public offering.
Online discount retailer Wish and installment loans provider Affirm could join Doordash and Airbnb in making their financials public in the next few weeks, according to people familiar with their plans. All would seek to hold their IPOS before the end of 2020, the people said.
That would add billions of dollars to the record total of more than $140 billion raised on U.S. exchanges this year, according to data compiled by Bloomberg. That includes special purpose acquisition companies, or SPACS, which have reached all-time highs, the data show.
IPO advisers are expecting to see a record amount of listing activity during the period between the U.S. Thanksgiving and Christmas holidays. Companies that sat out the market chaos during the early days of the Covid-19 pandemic are now rushing to go public, after also waiting for the result of the U.S. election before making their move.
Airbnb will seek to raise about $3 billion in its IPO, people with knowledge of its plans have said, making it the largest of the four. The home rental company had intended to make its IPO filing public on Thursday, but decided to wait until next week to avoid its news being overshadowed by the aftermath of the U.S. election, Bloomberg News reported.
The public filing — or flipping — of listing documents marks an important milestone in the IPO process, giving investors their first full look at a company's finances as well as details of its operations and ownership. Fifteen days after a prospectus becomes public, a company can begin taking investor orders for shares in the IPO.
San Francisco-based Doordash raced ahead with its plans after it helped pass a California ballot proposition that allows it and other gig economy companies to treat drivers and delivery workers as independent contractors rather than employees. Its revenues reflect the explosion in demand for delivery. Last year, Doordash generated $885 million in revenue. During the first nine months of 2020, revenue more than doubled that to $1.9 billion.
Online retailer Wish filed confidentially in late August for a listing and is likely to reveal its prospectus within two weeks, people familiar with its plans said. The company, a sponsor of the National Basketball Association's Los Angeles Lakers, was last valued at $11.2 billion in August 2019, a statement at the time showed.
A public filing from Affirm, which lets online shoppers pay in installments, could also be imminent. The company said in October that it had filed with the SEC confidentially.
Investors won't have to wait much longer to see the stock market debut of video game platform Roblox, last privately valued at $4 billion. The company said in October it had submitted confidential paperwork.
Timing for all the listings could change and discussions about valuations of the companies are ongoing, the people said. Representatives for Affirm and Wish declined to comment.
The incoming wave of consumer technology listings follows a rush of enterprise software companies that came to market in September, when seven software makers, including Snowflake, Unity Software Inc., Asana Inc. and Palantir Technologies Inc., went public.
The tech IPO boom is likely to keep rolling into 2021. Grocery startup Instacart, which hit a valuation of $17.7 billion in an October funding round, could list next year, as could $10 billion software maker Uipath. Used-clothing platforms Poshmark and Thredup have each filed confidentially for a listing, while online mortgage lender Better.com has tapped banks to help it go public in 2021. Dating app Bumble is also preparing an IPO for early next year, which could value it at $6 billion to $8 billion.