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Next year's IPO lineup could make 2020 the biggest year yet for initial public offerings. That's saying a lot considering $50 billion was raised by IPOs in 2019, plus the success of public offerings like Beyond Meat Inc. (NASDAQ: BYND).
Beyond Meat stock soared almost 200% in the first three months after going public in May 2019.
That level of potential is what makes IPOs so exciting to watch in the first place.
What's even more exciting are some of the most hyped IPOs that could go public in 2020. All these companies are in fast-growing, up-and-coming industries that are already worth tens of billions of dollars- if not more.
In fact, valuations of just 10 potential 2020 IPOs range anywhere from $100 million to more than $100 billion...
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To help our readers remain up-to-date on all of these massive IPOs, we've created a definitive list of the most potentially profitable IPOs to watch in 2020.
And if you're interested in investing in companies before their IPOs, you can follow our friend Neil Patel at the Startup Investor. He and his team are always clueing investors into the next big money-making opportunities before they go public.
Now, here's our list of the top 10 IPOs to watch for in 2020...
2020 IPOs to Watch, No. 10: Ant Financial
The company is in charge of Alipay, Alibaba's Tmall and Taobao e-commerce financial transactions service. But other products and services include small and mid-size enterprises (SME), consumer lending businesses, and a private credit platform.
This push into online lending has been incredibly lucrative for the company, too. The firm has over 1.2 billion users with an average loan size of $1,600, according to Ant Financial's President of International Business Group, Douglas Feagin.
And Ant Financial plans on growing that number to 2 billion over the next decade.
While rumors of an Ant Financial IPO have been going around, the firm hasn't given an official timetable yet for its IPO. But now that Alibaba has a 33% stake in the private firm, many speculators see Alibaba's restructuring of Ant Financial as a sign that it could go public - maybe as soon as 2020.
2020 IPOs to Watch, No. 9: Postmates
Postmates is an e-delivery startup. But what makes it different than other services like UberEats and DoorDash is the fact that it not only delivers food but also retail products from local businesses.
With its popularity among celebrities and athletes like Post Malone and Kevin Durant, a 2020 Postmates IPO seems inevitable.
Since 2011, Postmates has raised over $903 million. This has pushed its valuation to $2.4 billion.
And with over 5 million deliveries in 3,500 cities across all 50 U.S. states, the valuation makes a lot of sense.
But there's a lot of competition surrounding Postmates. Not only is it facing off with DoorDash and Uber Technologies Inc. (NYSE: UBER), but there's also Grubhub Inc. (NYSE: GRUB) and even Amazon.com Inc. (NASDAQ: AMZN), too.
This level of competition has pushed Postmates to innovate on its services. For example, Postmates offers a monthly membership called Postmates Unlimited that waives the typical delivery fees.
Originally, Postmates planned on going public in late-2019. But following rough launches from firms like Uber and Lyft Inc. (NASDAQ: LYFT) and the failed IPO from WeWork, Postmates decided to delay its IPO.
While the firm hasn't confirmed a new IPO date yet, if the 2020 IPO market looks favorable, Postmates could very well go public. But for now, we'll have to wait for more information to come out.
2020 IPOs to Watch, No. 8: Robinhood
Robinhood has practically revolutionized online stock trading by offering a zero-fee trading app.
Robinhood's user interface is sleek and simple - making it excellent for novice and tech-savvy investors. And that's exactly the demographic Robinhood is going after. Young, tech-savvy, investors looking to invest in the stock market, but who don't need all the bells and whistles you'd get with the bigger, full-service brokerages.
Plus, users interested in more in-depth services can sign up for Robinhood's $10-a-month Gold Premium subscription. This lets users transfer $1,000 into their investment accounts immediately, rather than having to wait out the traditional five-day verification period.
Plus, Robinhood gives its users incentives to invite friends and family to use the trading app by giving a free stock to each person that signs up.
Since it's competing against major brokerages like Fidelity, Robinhood has also begun to branch out its investment offerings to include options, cryptocurrency, and even FDIC-insured cash management accounts.
Crunchbase reported that the app's zero-fee trading, subscription model and consumer-friendly practices have helped it achieve a $7.6 billion valuation.
Of course, its competition is still fierce. Now, firms like E*Trade Financial Corp. (NASDAQ: ETFC) and Charles Schwab (NYSE: SCHW) are now offering free trading as well. And whether Robinhood matches up against its competitors once it goes public in 2020 is still up in the air.
But the Robinhood IPO is still one that investors will want to watch.
2020 IPOs to Watch, No. 7: Casper
Since its founding in 2013, Casper has turned the mattress industry on its head.
This is a result of Casper's straightforward business model. Through the firm's online store, you can buy premium and custom-made foam mattresses for fairly low prices delivered straight to your door.
Casper's mattresses range anywhere from $395 to $2,695. That's a pretty big deal considering rival brands like Tempur Sealy have mattresses that go as high as $8,000.
While Casper has mostly operated in the e-commerce sector, its products are now available across 1,000 chain retailers in the United States. It even has 23 stores of its own, with plans to open 200 more.
Casper offers more than just mattresses, too. It has bed frames, pillows, nightstands, blankets, lights, and even dog beds.
According to Bloomberg, this helped Casper make more than $373 million in revenue in 2018 - a 49% increase from 2017.
Plus, the firm has officially sold mattresses to over 1 million customers. It'll be profitable by the end of 2019 as it forecasts revenue will grow to more than $556 million by 2020.
Now, Casper has become one of the largest mattress companies in the world, with a valuation of $1.1 billion.
And while Casper hasn't released an official IPO date, it is preparing for a Casper IPO in the first half of 2020.
2020 IPOs to Watch, No. 6: Airbnb
Airbnb has single-handedly disrupted the entire travel and lodging industry. Airbnb operates in 191 countries, with over 6.4 million unique rental listings. Plus, over 150 million people have used Airbnb's services.
Airbnb lets its users list rooms, apartments, and even homes for short-term rentals. Guests can either use Airbnb's app or go online to reserve and pay for rooms. Airbnb takes a percentage of every booking without having to own the properties themselves. This also means guests who use Airbnb can find places to stay while traveling at better prices than many hotels.
That's been an insanely lucrative business model for the company. According to Airbnb, its revenue in the first half of 2019 hit $1.6 billion. And its valuation is rumored to be anywhere from $31 billion to $35 billion. Airbnb's valuation could rocket even higher before its public offering, too - especially once you consider it's one of the rare few startup unicorns that is already profitable.
But there are some hurdles in the way of Airbnb's success.
Many cities cite Airbnb as a contributor to skyrocketing housing costs and property values, even among non-commercial neighborhoods. That could lead to stricter regulations on Airbnb's business. Beyond that, many hotel interest groups haven't been happy with Airbnb's avoidance of abiding by zoning regulations and paying the same taxes. That may lead to new laws governing Airbnb.
These potential regulations on Airbnb could also certainly impact its bottom line. But with profitability and its billions in revenue, it's possible Airbnb could overcome concerns over its regulatory hurdles.
With Airbnb active in over 81,000 cities worldwide with tons of consumer love, the firm could inevitably become one you'd want to invest in once it starts trading publicly. But we suggest waiting two or three quarters to see how its financials look following the Airbnb IPO.
2020 IPOs to Watch, No. 5: Palantir Technologies
It's possible you may not know much about the next company on our list. It's a secretive Big Data company that doesn't reveal much about its business. Yet, with a whopping $26 billion valuation, the Palantir IPO could be one of the biggest public offerings of 2020.
Here's everything we know about Palantir...
Co-founded by Peter Thiel in 2003, Palantir is a firm that develops software specifically for pulling information out of large data sets.
While that's not the most exciting sounding business, big data is a massive industry that'll only continue to grow. Statista reports that in the United States alone, the Big Data market will grow to $108 billion.
And firms are beginning to understand just how much they can learn about their operations by utilizing Big Data software. This applies to practically every industry ranging from intelligence agencies to insurance companies.
Plus, with the rapid growth of smartphones and the Internet, an insane amount of new data is created daily. Companies like Facebook Inc. (NASDAQ: FB) already mine users' data to create tailored advertisements.
That means every single thing you click, comment on, or like is analyzed. Even the amount of time you spend on each page is looked at by machine learning algorithms to create targeted ads.
That's why Big Data as a whole is worth $189 billion, according to PCMag.
But Palantir is turning its big data tools on much bigger problems. For example, Palantir assisted the U.S. government in tracking down Osama Bin Laden. And it has contracts with SOCOM, the Air Force, West Point, the National Security Agency, the Marine Corps, the FBI, the CIA, the CDC, and the Department of Homeland Security.
That's led to the firm reportedly made as much as $1 billion in revenue in 2018 alone. That's a 66.7% increase from its 2017 revenue of $600 million.
Originally, Palantir's IPO was expected in 2019. But Bloomberg reported that the firm is officially pushing off a public offering until 2020.
It's also entirely possible the firm may remain private for the foreseeable future.
There are some headwinds against the company, too. As more and more firms across a variety of industries embrace Big Data analysis, personal privacy has become a major concern among advocacy groups.
Facebook alone has been through a variety of scandals ranging from handing over user data to Cambridge Analytica in 2016 to defending the use of false political ads on its platform in 2019.
Some places in the world, like the EU, are taking these growing privacy issues very seriously as well. In 2018, the EU passed the General Data Protection Regulation (GDPR) that regulates how companies can collect and use user information.
And Palantir has had plenty of protesters, with some having protested right outside of its headquarters in Silicon Valley.
With Palantir's decision to delay its IPO to at least 2020, the firm may opt out of a public offering altogether in the current climate.
2020 IPOs to Watch, No. 4: Didi Chuxing
For the uninitiated, Didi Chuxing is basically the Chinese Uber.
You can use the Didi Chuxing app to reserve private cars, bikes, and even use it as a delivery service.
However, Didi goes beyond the traditional services we see from ride-sharing companies. It not only offers car insurance but also enterprise-specific transportation services, a full-on taxi system, and public transport buses.
Didi has a total of 550 million users and 31 million drivers across several countries like China, Mexico, Japan, and Australia. And its rapid growth and the massive user base it's acquired since 2012 has given it a valuation of over $62 billion.
Now, rumors are swirling around the idea of a Didi Chuxing IPO. And it could very well drop in 2020.
2020 IPOs to Watch, No. 3: Hemptown
About the Author
Daniel Smoot is a Baltimore-based editor who helps everyday investors with stock recommendations and analysis. He regularly writes about initial public offerings, technology, and more. He earned a Bachelor's degree from Towson University.