Most Anticipated IPOs of the Second Half of 2023: Instacart, Rubrik, Stripe and Impossible Foods.
The global IPO market eagerly looks forward to a resurgence in the second half of 2023. With signs of lower volatility in the global market and the anticipation of a slowdown and eventual end-to-interest rate hikes, favorable conditions seem to align to reinvigorate IPO activities worldwide.
As we delve into the trends and factors shaping the IPO landscape for H2 2023, we anticipate a strong IPO pipeline, the emergence of industry-leading companies, the importance of ESG strategies, and the normalization of the SPAC IPO market.
Building Momentum: A Strong IPO Pipeline Awaits
Companies across various industries have been building a robust IPO pipeline, eagerly awaiting the opportunity to enter the market. With an optimistic outlook, investors seek the next generation of industry leaders and iconic companies to add to their portfolios. These highly anticipated blockbuster IPOs are expected to act as catalysts, reigniting market participants' enthusiasm and propelling IPO activities forward.
Mitigating Factors: Stabilizing the Global Economy
Apart from government monetary policies, several key factors are crucial in maintaining a stable IPO market. The stabilization of geopolitical tensions and conflicts, along with the easing of energy supplies and prices, can help avert a global economic recession. A recession would adversely affect companies' earnings, stock market performance, and the window for IPO transactions. As we look ahead to 2023, these factors remain critical in ensuring a conducive environment for successful IPOs.
Shifting Investor Focus: Emphasizing Company Fundamentals and ESG Strategies
In recent years, the technology sector has experienced significant valuation and share price drops. This decline has prompted a shift in investor preferences, with greater emphasis on company fundamentals, profitability, and positive cash flows rather than lofty growth projections. To attract investors, companies preparing for an IPO must be prepared to articulate their environmental, social, and governance (ESG) strategies. Research shows a positive correlation between post-IPO share price performance and the communication of robust ESG strategies. Investors increasingly want to align their investments with companies prioritizing sustainability and responsible business practices.
SPACs: Returning to Normalcy
The surge of special purpose acquisition companies (SPACs) listed since 2020 has been a notable phenomenon in the IPO landscape. However, these SPACs face a crucial juncture as they approach their two-year de-SPAC window. By this time, they must either find a target company to merge with or return the IPO proceeds to investors. As we look towards 2023, we expect the SPAC IPO market to normalize, returning to levels seen before the remarkable growth experienced in 2021.
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2023 IPO CANDIDATES
Instacart wants Wall Street to stabilize a bit before joining. It appeared ready for its IPO last May when it filed initial public offering paperwork with the Securities and Exchange Commission. Instacart wanted to take the plunge by the end of 2022, but those plans have stalled. The paperwork is still there, and the home-delivery retailer could go public in the coming months.
Rubrik may raise more than $750 million in its IPO, three of the sources added, though that may change based on market conditions as the preparations are still at an early stage. Three of our sources said Rubrik could choose to go public in 2024, if the IPO market becomes more welcoming. It has lately been hostile to flotations due to market volatility.
Stripe's IPO has been one of the most heavily anticipated listings of the past few years, but with ongoing market volatility, the date of its public offering has continuously been pushed back. Now the company has said it is going public officially and has given itself a one-year deadline to decide how and when.
The CEO said last February: "I wouldn't expect it, probably not. Anything's on the table, but we're well-capitalized at the moment, and it's not a great macro environment to do so. It'll happen, probably not this year."
As we anticipate the second half of 2023, the global IPO market shows promising signs of regaining momentum. With a strong IPO pipeline, industry-leading companies waiting to make their mark, the significance of ESG strategies, and the normalization of the SPAC IPO market, there is an air of optimism within the investment community. However, companies must adapt to changing investor preferences, showcase their strengths, and communicate their commitment to sustainability. As the global IPO market navigates the upcoming year, stakeholders should remain vigilant, keeping a close eye on the evolving trends that will shape the future of public offerings worldwide.
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Disclaimer
This content is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.
