Start the conversation
IPOs last year had the highest volume of revenue in history - $315 billion raised, more than double the $140 billion a year prior.
And the IPOs to watch in 2022 could make this year even better.
The new stocks rumored to go public will change the world in unprecedented ways. We've got innovators in fintech, software and satellites that could make nice additions to your portfolio this year.
Here are the 11 monster IPOs to look forward to in 2022:
- Impossible Foods
We're still waiting for another company to steal the title of "Biggest Software IPO in History" from Snowflake Inc. (NASDAQ: SNOW). Snowflake Sold 28 million shares for a total of $3.4 billion. The share price bolted out of the gate, more than 150%, from $120 to above $300.
Now, with the expanding role of software in the Internet of Things, the Metaverse, crypto and more, it could very well be surpassed.
We'll go into each upcoming IPO in further detail. But first, here's how we can understand IPOs in 2022.
How to Think About IPO Investing in 2022
IPO investing will always carry a little risk. You don't know what to expect from a new stock. All you have to go on is past performance, which can be an unreliable indicator for the future.
However, you can still get some idea of the company's trajectory compared to others. If a company's revenue appears to be accelerating, and you see its product going up in demand, it could be an IPO to watch.
If the company's revenue appears to have leveled off after years of growth, the IPO might be a cash grab.
You'll never know for sure until it happens. But you can always dive in for a little more clarity.
Expected valuation and price can offer that. But they can also be hyped up, in which case, you'll see the stock crash from the high post-IPO.
That's why, for many IPO stocks, you might consider giving them some time to see how their price fluctuates.
To learn more about IPO investing, check out our comprehensive IPO investing guide.
Now, let's get into these 2022 IPOs.
The Stripe IPO Is a Fintech Milestone
Stripe is the second-highest venture-backed company in the world after ByteDance. It really took off in 2020 as people under lockdown started gravitating toward e-commerce.
This company makes software as a service (SaaS) to enable easy and fast payments between e-commerce vendors and their customers.
Digital payments, in general, are on the rise. And the pandemic resulted in stellar performance for this San Francisco- and Dublin-based company.
With the convenience and versatility of Stripe's services, this company could stick around for a long time.
It's growing fast, and heavily backed. Still, it might not be your first choice when it comes to investing in the fintech sector...
Buy This Stock Instead of Stripe
Block Inc. (NYSE: SQ) is a fintech stock that already trades publicly. Money Morning's Alex Kagin say it has all the marks of a stable, fast-growing fintech.
Block has a slightly lower market cap than Stripe. But analysts love this stock. They're targeting growth of 120%, a climb from $163 to $360 over the next 12 months.
Block also has a diverse range of assets, even allocating some of its balance sheet to Bitcoin. If Bitcoin takes off like the bulls want it to, it's great for Block. If not, Block is still a popular, useful service on its own.
The company has POS systems everywhere, in several brick-and-mortar chains. Hard to compete with this one.
This should get your attention before any other fintech stock. Then, if you want to further optimize your portfolio, buy Stripe stock after it's traded a little longer on the public markets.
Why the Databricks IPO Could Be the Next Snowflake
Databricks is known for making open-source software in the machine learning space.
It earned fame and notoriety for a line of software under the name Apache Spark. The company offers courses and conferences centered on the product.
Lately, it's aiming to offer Spark as a cloud-based platform. That will, no doubt, please its 5,000 users around the world, and possibly add more.
One way Databricks adds value to enterprises is by making it easy to update data systems. Companies are increasingly reliant on a stable data infrastructure, but they don't want to continually overhaul their systems to keep up with the trends.
Databricks continues to raise funds and ignite rumors of a public offering. And 2022 could be the year.
Here's what you should know about Databricks stock before that happens.
Is Databricks Stock a Buy?
Data will grow more important to organizations with time. Hybrid organizations are an important factor in this. More people will work from home. Some will even take on a hybrid schedule of bouncing in and out of the office.
And Databricks helps with these kinds of changes. Companies adopting new software platforms will need Databricks to help integrate them without turning everything on its head.
Snowflake was a great example of how the market can spot this trend. Retail investors poured money into Snowflake, because they can see cloud computing infrastructure getting more important down the line.
And they're right.
IT spending is expected to increase to $4.07 trillion in a few years.
Everyone wants a piece of this software company, and you should too.
Why the Discord IPO Is One to Watch
Discord offers a communication platform with text, voice, and other capabilities. It quickly went from a userbase of only video gamers to a variety of niches.
Thought leaders, coaches, and other businesses now use it to connect with their followers and customers. Fitness experts, artists, and teachers of different kinds have found it useful.
The company has over 300 million registered users and counting. For perspective, Twitter Inc. (NASDAQ: TWTR) has 192 million daily active users and was founded five years before Discord.
This company is growing fast, and its following is loyal.
And that says a lot about the future of this company.
Here's whether Discord stock is a buy after its IPO.
Should You Buy Discord Stock?
Discord shares are a rare "buy" if you can get in early.
The company had outstanding performance through the pandemic, and it will continue its stride as the world gets more digitized and people need fast, personal communication with their brands.
The need for this sort of communication is not going away. The market for platforms like Discord is anticipated to rise 54% in the next three years.
And Discord is one of the top communication platforms in the space.
With Discord stock, you're looking at a company that's been able to withstand the toughest market conditions and likely prevail amid whatever comes next.
Impossible Foods IPO to Heat Up Non-Meat Market
Plant-based meat still has a ways to go before catching on with the mainstream. But for how recently it started making headlines, the sector has a solid foothold.
It started with Beyond Meat Inc. (NASDAQ: BYND), which popped more than 160% after its 2019 IPO. Investors saw promise in products that look and taste like meat but with fewer health risks.
If this wasn't yet an indication of the plant-based meat craze, the BYND brand made it into Whole Foods supermarkets.
Meanwhile, Impossible Foods is working with Burger King on an Impossible Whopper in Canada.
Patrick O. Brown started Impossible Foods after deciding that industrial animal farms were hurting the environment.
So, from both the health and environmental angle, this company has found a market of supporters.
The question is if they can hold onto it in the years to come...
Don't Buy Impossible Foods Stock Yet
The CEO of Impossible Foods said in late 2021 that an IPO was "inevitable." The company's expected valuation is expected to be around $20 billion, nearly 10 times Beyond Meat when it went public.
Of course, that brings up the concern of whether Impossible Foods has any more upside. Beyond Meat rose to about a $13 billion market cap after its IPO.
If you can get your hands on Impossible Foods stock after the IPO... don't. There's a good chance the stock will flatline. But, worst case, the company enters a price war with Beyond Meat and both stocks tank.
Plant-based meat, like ride-sharing, is a young industry where the early players are still trying to hash things out. That said, there will be winners and losers.
We just haven't seen much separation between the two yet.
The Instacart IPO Will Bank on New Shopping Trends
Delivery companies were in a league of their own during the pandemic. But even after lockdowns ended, people seemed to notice the benefits of having groceries delivered.
Enter Instacart, one of the premier grocery delivery apps out there now. Founded by a former Amazon.com Inc. (NASDAQ: AMZN) employee, what separates it from other delivery competitors is the shopping angle.
That's a good and bad thing, since indirect competitors like DoorDash and Postmates can still penetrate the shopping industry if they want.
The company has also received similar criticisms to other gig economy pioneers like Uber Inc. (NASDAQ: UBER), disputes over compensation and whether "shoppers" are employees or contractors.
Instacart still thrived amid the pandemic, in spite of it all. And it will probably continue to do so...
Should You Buy Instacart Stock After the IPO?
Instacart demand has grown at such a level that you probably wouldn't fear the stock flopping after the IPO.
A cause for concern, however, would be a battle with Grubhub, Uber Eats, or any of the other successful delivery companies.
Competition is what drove Lyft down more than 70% after its IPO. And similar price wars are expected in the gig economy.
We're still in for several years of competition between these gig stocks. But first-mover advantage can be super advantageous if Instacart plays its cards right.
Sure, Instacart was successful for a moment. But give it some room before buying shares after the IPO.
Klarna IPO to Create a U.S. Fintech Battle Royale
Another big fintech IPO that could hit in 2022 is Klarna.
You've probably heard of "buy now/pay later" apps in this space. If not, these are companies like Afterpay and Affirm, which give customers credit on purchases.
Klarna focuses on e-commerce for this. Based in Sweden, the company offers services worldwide for online, direct, and post-purchase payments.
The company is growing fast. In 2019, less than six years after founding, it was doing 40% of Sweden's e-commerce sales and totaling $35 billion in online sales.
You can't dismiss Klarna as a Sweden-only stock, however. It's pushing to expand into the United States, Great Britain, and elsewhere.
Of course, it will have its work cut out...
Should You Buy Klarna Stock?
As with many other young, rising tech stocks, competition poses a threat to Klarna. There are plenty of digital payments companies in this market that could give them a run for their money.
Still, Klarna may have the vigor to play ball with big tech. It's been making relationships with the British government while other fintech companies come under regulatory scrutiny there. It also holds about 18% of the U.S. BNPL market, which is not small.
However, you'll start to see the winners and losers stand out more clearly in the years to come. Affirm controls 36% of the market, but its lead over Klarna could skyrocket as the market chooses a winner.
And even after Affirm and other BNPL competitors, you still have Bit Tech to worry about.
Basically, investing in Klarna could be a gamble if you're looking for long-term value.
iFit IPO Spotlights the Future of Fitness
iFit makes interactive, tech-based exercise equipment, similar to Peloton Interactive Inc. (NASDAQ: PTON). It offers a subscription to an expansive library of on-demand workouts.
Since its founding in 1977, it's raised capital and acquired new technologies to deliver the fitness products it has today. Fitness products like bikes, treadmills, and ellipticals are connected on a single operating system.
iFit's bike could be seen as an affordable alternative to Peloton, topping out at $1,999, whereas Peloton's best bike goes for $2,495.
It will be interesting to see iFit compete with Peloton in terms of its equipment and subscription packages.
For now, they're fairly matched, though iFit claims to have a wider range of options.
Let's see if that translates into a successful IPO...
Should You Buy iFit Stock?
iFit is not profitable, and a price war with Peloton may not bode well for the company.
Heavy ad spending could be seen as a necessity in this space, and it will likely take a sizable chunk out of iFit's top line. It spent 30% on sales and marketing in two years. Peloton spent a little less.
And while Peloton continues to hype its product with killer marketing, iFit continues to plunge into a bigger deficit, going from $380 million to $909 million in a single year.
The iFit IPO could make a nice capital injection for the company, but it could also just be a drop in a massive bucket.
The battle between iFit and Peloton will come down to who can get the most subscribers. Peloton has 5.9 million today, and it will be long before iFit closes that gap - if ever.
For that reason alone, best avoid iFit stock for a while after the IPO.
Is ThoughtSpot the Most Exciting IPO of 2022?
ThoughSpot is another contender to steal Snowflake's title of "biggest tech IPO of all time."
This is another cloud computing company for which the market has high hopes. So, if you're looking for a value stock going public, there's none better than ThoughtSpot.
Unlike many stocks we mentioned earlier - cutthroat gig economy stocks with enormous marketing budgets - the cloud industry has a lot more room for niching down.
In other words, there's room for both a Snowflake and a ThoughtSpot as the market hashes out the benefits.
Snowflake does data storage, and ThoughtSpot does data analysis.
Here's more on why ThoughtSpot stock is a buy...
Should You Buy ThoughtSpot Stock?
ThoughtSpot has several Silicon Valley elites at the helm - people coming from Apple, Google, and Microsoft, no less.
It's only been around since 2012, but it's seen impressive global growth since then. Today, it has offices in London, Seattle, Tokyo, India, and more.
And with enterprises everywhere becoming more data-centric, these won't be the first big firms calling ThoughtSpot's name.
Gartner put this company in its list of top analytics firms for 2020.
And if they can get it for under $200, ThoughtSpot should also top every investor's list of IPO stocks to buy for 2022.
The Starlink IPO Could Be Like Buying Tesla at $40
So far, Tesla Inc. (NASDAQ: TSLA) is the only company owned by Elon Musk that trades on a public exchange.
If you were to judge by Tesla stock's performance alone, you'd have high hopes for Starlink. Tesla is up more than 985% since January 2020.
With so many innovative projects under Musk's watch, here's how Starlink stacks up...
Starlink is a project connected to Musk's space exploration company, SpaceX. They found a way to make more affordable satellites and launch them around the world, creating broadband access in more places than ever before.
The rumor has been that Musk wants to take Starlink public as a spin-off of SpaceX, once growth is "consistent."
The company already has more than 1,500 satellites in low-earth orbit. And there are yet 40,000 more where those came from, which have already received approval from the U.S. Federal Communications Commission.
Data was released in 2017 projecting Starlink's future revenue at $30 billion in 2025. If true, that would be huge, given the SpaceX rocket launch business only expects $5 billion.
Should You Buy Starlink Stock After the IPO?
Tech companies love government money. And Starlink won contracts with the feds a couple years back, providing internet for 600,000 homes in 35 states.
There are billions more to tap into if Starlink can further cement its technologies into use. Eventually, Elon Musk wants to have more than 40,000 satellites hovering in the atmosphere. A high ceiling bodes well for Starlink stock whenever it becomes available.
SpaceX will also share in billions as it partners with various public and private organizations, and Starlink is an irreplaceable part of that. Starlink has been behind several Falcon 9 missions to date.
Despite everything Starlink is involved with regarding space travel, its contribution to the internet will be monumental if it pulls it off.
If adopted, cheaper internet connection will be the dream revenue stream from both public and private sources.
Why Everyone's Talking About a Reddit IPO
Reddit has been on the IPO docket for a while now. And the company has made no secret about it.
2022 might be the year. Reddit has been open about sitting down with investment bankers and going about its prospects.
Whenever the IPO comes, lots of press always helps in the lead-up. And Reddit's had no shortage of that with the WallStreetBets page hosted on the site.
WallStreetBets was the discussion board that initiated short squeezes on GameStop Corp. (NYSE: GME) and other failing stocks. It continues to be an engine of market discussion.
With Reddit circulating the headlines, it warms the waters for an IPO in 2022. Here's whether Reddit stock is a buy, if so.
When Can You Buy Reddit Stock?
Reddit calls itself "the front page of the internet," with over 52 million active subscribers.
Its revenue comes mostly from advertising, and the nature of the site - themed discussion boards - makes targeted ads super advantageous.
Whether users are into sports, cars, cooking, or cutting hair, you'll probably find a board for it.
And the proof is in the pudding. Reddit almost doubled its revenue in 2019. And its userbase hasn't subsided through the pandemic - it had about a 50% increase in revenue for 2020.
It reported $100 million in ad revenue in Q2 2021.
Now, after years of chatter, Reddit finally filed in December 2021.
And with a company getting this much attention still focused on increasing its userbase, you should look for early shares if you can get them.
That's now possible through Robinhood's IPO Access.
Chime IPO Stokes the Future of Mobile Banking
Chime is another fintech company on the cusp of the digital banking revolution.
Banks everywhere need digital solutions to keep up with changing consumer preferences. Chime carries out the mobile banking services of Bancorp (NASDAQ: TBBK) and Central National.
The San Francisco company has become known as one of the first and most reliable banks without a physical location.
Because it pays less on rent, it can provide customers with higher-yield savings accounts, which in turn brings in more customers.
In addition, Chime is an ideal company for reaching younger generations with tech-centered banking services.
It continues to make acquisitions and invest in its technology meanwhile. One example is the Pinch app, which helps customers keep up with their rent and credit scores.
Chime is also a partner of the Dallas Mavericks basketball team, so it's not lacking in brand exposure.
Here's whether Chime stock is a buy come IPO...
Should You Buy Chime Stock?
At last report, Chime serves 8 million customers daily.
It has a massive opportunity with younger, more tech-savvy generations. Sixty-four percent of Gen Z claims to be constantly online.
Following the trajectory of banking technology, whatever comes after Gen-Z could create monster revenue for Chime.
People increasingly want less interaction with a bank teller. They also want less interaction with phone operators.
Chime gives them that.
While the pandemic was an initial boost for this touchless system, mobile banking is a much bigger trend outside of all that.
It's going to keep rising for many years to come.
That's why chime could be one of the top stocks to buy if you want to get a piece of the future of finance.
Look out for it to go public in 2022.
Get Our Best Stock Picks Delivered Each Month
Join the Money Map Report today, and you'll have everything you need to help turn our longest-running research service into cash in the bank.
We believe the stocks we're recommending have the power to deliver life-changing profits - not just in the coming weeks or months, but far beyond.
You'll have all you need to be successful right at your fingertips - research, recommendations, and step-by-step instructions for building a lucrative portfolio.
Join over 500,000 readers and get free daily updates on the best ways to make money. Subscribe to Money Morning.
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.