After an IPO boom on Wall Street, these big companies could float in London, the US or Europe next year.
Airbnb (NASDAQ:ABNB) and DoorDash (NYSE:DASH) have given a huge boost to IPO prospects at the start of 2021 after their eye-watering debuts capped a memorable year for new tech listings on Wall Street.
December’s stunning first day sessions for the home rental and food delivery businesses saw their valuations more than double, proving beyond any doubt that investor appetite for fast-growing technology stocks remains as strong as ever.
Their performances should provide more than enough incentive for the likes of cryptocurrency exchange Coinbase and grocery shopping business Instacart to pursue listings, particularly when Wall Street markets are setting records and the US economy is in recovery mode.
London might also get in on the act through unicorns Deliveroo, Darktrace and Trustpilot. Their planned debuts come as the UK carries out a high-level review to see how it can attract “the most successful and innovative companies” after a barren few years on tech IPOs.
Away from tech, the arrival of Europe’s largest veterinary group IVC Evidensia in London would outstrip the successful £5.4 billion listing of Hut Group owner THG Holdings (LSE:THG) in October.
Here are some of the possible flotations to look out for in 2021:
The chances of fast-food delivery firm Deliveroo listing in London in 2021 have been boosted by Wall Street’s red-hot reception for DoorDash after its IPO in December.
Favourable trends in the sector have been accelerated by the Covid-19 pandemic, with European rivals Just Eat (LSE:JET) and Delivery Hero (XETRA:DHER) among those expanding. Deliveroo, which works with 44,000 restaurants and 35,000 riders in the UK, is also moving into on-demand convenience and grocery delivery after setting up a trial partnership with Waitrose.
It is thought that Deliveroo could be valued at more than £2 billion, with November’s appointment of former Premier League acting chair Claudia Arney to lead its board another sign that Deliveroo is readying for a float. Goldman Sachs and JP Morgan are said to be working on the IPO, according to Sky News.
Amazon (NASDAQ:AMZN) holds a 16% slice of Deliveroo, which the Competition and Markets Authority looked at in depth before clearing in August. However, the regulator warned that it would reassess this involvement if there is further investment by the internet giant.
The Cambridge and San Francisco-based cyber security company is thought to be working on plans for a £3.8 billion float early in 2021.
The company, which was the first to develop an AI system for cyber security, has 44 offices and more than 1,300 employees. Its investors include including KKR, Summit Partners and Invoke Capital, which is the technology investment fund headed by former Autonomy boss Mike Lynch.
Invoke provided seed-funding after Darktrace was founded in 2013 by mathematicians from the University of Cambridge. Darktrace is led by Poppy Gustafsson (pictured below), winner of the Veuve Clicquot Business Woman Awards in 2019.
Trustpilot has the potential to achieve unicorn status - start-ups worth $1 billion - if it is valued at £775 million in an IPO expected to take place in the first quarter of 2021.
The business review platform was launched in 2007 and now employs 750 people in eight offices, including London, New York, Berlin and its Copenhagen headquarters. Consumers have left reviews on Trustpilot over 100 million times for more than 400,000 companies.
A flotation would be a profitable move for AIM-listed venture capital firm Draper Esprit (LSE:GROW), having supported the company through various funding rounds since 2013. Draper’s interim results in November showed Trustpilot as its biggest investment after a valuation gain of £15.6 million over the period to £80.9 million by the end of September.
The potential £10 billion float of the Bristol-based veterinary group would provide investors with exposure to the booming pet care sector.
The company was founded under the name of Independent Vetcare in 2011, when it had just 20 practices. It is now Europe’s largest veterinary group with more than 1,500 practices spanning 11 countries after private equity owner EQT merged the business in 2017 with Evidensia, a Swedish veterinary group also under its ownership.
Last year, IVC entered into a partnership agreement with Nestle Purina Pet Care when food maker Nestle (SIX:NESN) bought a minority stake. IVC is chaired by former WH Smith CEO Kate Swann, with the retailer’s ex-boss Stephen Clarke now IVC’s chief executive.
The company has reportedly appointed bankers at Goldman Sachs and Jefferies to work on a potential float, although it may also consider a sale to a private equity firm.
The petrol forecourt business hit the headlines in September when it unveiled the takeover of Walmart-owned supermarket chain Asda in a surprise deal worth £6.8 billion.
A month later, the Times newspaper reported that the company was looking for a chairman and independent directors in order to meet corporate governance requirements ahead of a potential stock market listing in 2021.
The company, which is owned by the Issa brothers and private equity firm TDR Capital, was first linked to a stock market float back in 2019. It is one of Britain's largest private companies, having grown through the merger of Euro Garages and European Forecourt Retail Group in 2016. Euro Garages was founded in 2001 from a single site in Bury.
Its progress towards a float may have suffered a setback, however, after the Competition and Markets Authority launched an investigation into whether the Asda deal will lead to a substantial lessening of competition, particularly in the petrol forecourt market.
One other London listing to look out for is online pension provider PensionBee, which was founded in 2014 by CEO Romi Savova and chief technology officer Jonathan Lister Parsons.
It has £1.2 billion in assets under administration on behalf of more than 65,000 invested customers.
Savova said in November that a listing could take place within a year to 18 months, when it is thought the business might attract a valuation of about £300 million.
She added: “A listing on the London Stock Exchange will increase the profile of PensionBee and enable us to access capital, which we will invest in continuing to grow the business.”
The company is hoping for a listing on the high-growth segment of the London Stock Exchange’s main market. Designed for rapidly growing companies, Just Eat is the only British company to have listed there so far.
PensionBee's board is led by former Prudential chief executive Mark Wood and includes Michelle Cracknell, who is former boss of the Pensions Advisory Service. Mary Francis, who has held non-executive roles at the Bank of England and Barclays, was recently named as senior independent director. Current backers include State Street Global Advisors.
Vodafone (LSE:VOD) has chosen Frankfurt over London for the £14 billion flotation of its sprawling Vantage Towers operation, which features a network of 68,000 sites across nine countries and holds a number one or two market position in all but one of its territories.
The IPO, which is due in early 2021, is expected to be attractive to investors as a play on the rollout of 5G in Europe.
A capital markets day hosted by Towers CEO Vivek Badrinath also highlighted Vantage's income generating potential, including a promised pay-out ratio worth 60% of free cash flow.
Badrinath added: “The growth potential in the towers sector is fuelled by the requirement for data as well as the roll-out of 5G technology and new and wider network coverage obligations across Europe. These factors will increase the number of tenants renting space on our towers.”
US floats in 2021
Coinbase would become the first major US cryptocurrency exchange to go public, should it seek approval for a listing from the US Securities and Exchange Commission.
The company, which was valued at more than $8 billion in its last fundraising round in 2018, is thought to considering a direct listing rather than IPO so it can allow existing investors to sell down their holdings.
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Speculation has also focused on San Francisco-based digital payments company Stripe, which was valued at $36 billion after raising $600 million from investors in April.
The start-up, which is now regarded as the US's most valuable private fintech company, hasn't spoken publicly about the possibility of a Wall Street listing.
One of its customers is Instacart, which according to the Reuters news agency has picked Goldman Sachs to lead its IPO in a move set to value the delivery app at about $30 billion.
Launched in 2012, order volumes have surged by as much as 500% this year as consumers shopped online during the pandemic. It has also expanded into non-grocery goods.
China tech giant ByteDance is also said to be planning a Wall Street IPO of TikTok Global, which has been created to appease White House concerns about Beijing's influence over the video app.
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