Best Upcoming IPOs to Watch For

The best upcoming IPOs to watch for may be worthwhile for investors eyeing the potential of impressive profits.

An initial public offering (IPO) refers to the process of offering shares of a company to the public in a new stock issuance. U.S. IPOs hit a record high in 2021 with 1,073 companies hitting the public market.

However, extreme volatility, interest rate hikes and inflation have dampened the excitement for IPOs this year. That being said, a number of private companies have been preparing to go public, and some may still do so in the second half of the year.

Continue reading to find out the best upcoming IPO to watch for to profit.

Best Upcoming IPOs to Watch For: #1 Chime 

• Potential IPO Valuation: $25 Billion
• Expected Date of IPO: Second Half of 2022

Chime is an American financial technology (fintech) company that provides fee-free mobile banking services. Chime does not charge many of the traditional banking fees, it provides accounts free of charge, offers free fast payments, fee-free overdrafts and credit cards, and has other features like automatic saving.

The company is partnered with The Bancorp Bank and Stride Bank, which operate the accounts for Chime. This structure is similar to other U.S. neobanks, such as Current and Aspiration, that also provide accounts through partner banks but aren’t banks themselves. In fact, Chime is the largest neobank in the United States with over 13 million account holders.

Like other neobanks, Chime does not have physical branches, which became important during the 2020 lockdowns since many traditional banks were not prepared to move all their services online. This period was a major contributor to the company’s growth. Chime generated $600 million in revenue and doubled its user base from 5 to 10 million.

Furthermore, Chime has been seeking strategic mergers and acquisitions to grow its operations. In 2018, Chime acquired Pinch, a company that provides services for people to enhance their credit scores by timely reporting of rent payments to credit bureaus. In 2021, Chine acquired Charlie Finance, a financial services start-up that helps individuals track and manage their debt.

The company was expected to pursue an IPO in the first quarter of 2022. However, Chime delayed its plans to IPO to the second half of 2022 due to a few factors.

First, the company is working on adding new features related to lending and investing to its platform. Second, fintech stocks have declined 40% since October 2021. This has caused some investors to start demanding lower valuations. A cooling effect on the IPO market has occurred and caused a delay of Chime’s IPO date.

Best Upcoming IPOs to Watch For: #2 Mobileye

• Potential IPO Valuation: $50 Billion
• Expected Date of IPO: Second Half of 2022

Mobileye develops autonomous driving technologies and advanced driver-assistance systems including cameras, computer chips and software. The company aims to be a leader in the field of completely driverless vehicles, and has presented a number of vehicles equipped with advanced driverless technology.

The company was previously a public company before it was acquired by Intel Corporation (NASDAQ: INTC). However, due to the rapid growth that the firm has generated in recent years, Intel has confirmed that it will relist Mobileye as an individual entity.

Mobileye was a successful investment for Intel. In 2021, Mobileye accounted for $1.4 billion of Intel’s annual revenue, up 43% year-over-year.

The company has a great position on the market and key partnerships with automakers, such as BMW (OTCMKTS: BMWYY), Volkswagen (OTCMKTS: VWAPY), General Motors Company (NYSE: GM) and Ford Motor Company (Ford Motor Company NYSE: F), and already integrated its technologies into their vehicles.

Intel (NASDAQ: INTC) is most likely to pursue a traditional IPO for Mobileye rather than via a special purpose acquisition company (SPAC). SPAC makes the IPO process cheaper, faster and cheaper, which is why many new companies in 2020-2021 went public this way. However, this method has many disadvantages and many of these IPOs didn’t do too well.

Although many IPOs have failed recently, the partnership between Intel and Mobileye is strong and is likely to grow stronger after the IPO, so it could be a good idea to jump on board.

Best Upcoming IPOs to Watch For: #3 Stripe 

• Potential IPO Valuation: $74 Billion
• Expected Date of IPO: Second Half of 2022

Stripe, Inc. is an Irish-American financial services company that develops and offers payment processing software and application programming interfaces (APIs) for e-commerce and mobile applications. APIs allow for simple integrations for merchant checkout on websites and in mobile apps.

Stripe’s initial approach was very simple yet unique. The company gave developers a simple way to integrate a payment gateway into any website or application with just a few lines of code.

In March 2013, Stripe acquired Kickoff, an app for task management and chatting. This became the first of 13 acquisitions made to this day.

This could be a great opportunity to be an early investor in a company that has been going from strength to strength. Stripe registered $7.4 billion revenue in 2020, and has become much more than an API for payments, but a whole suite of tools for online businesses.

In March 2021, the company had a funding round led by Ireland’s National Treasury Management Agency and Fidelity Investments that raised $600 million and announced a valuation of $95 billion. However, due to a sell-off in tech stocks in early 2022, the company slashed its internal valuation by 28% – bringing it to $74 billion.

Best Upcoming IPOs to Watch For: The Bottom Line

By investing in an IPO, an investor can enter the ‘ground floor’ of a company with high growth potential. An IPO may be an investor’s window to rapid profit in a short time period. On average, they can bring 40% returns in the first 3 months.

Once the initial funding stages are out of the way, IPOs can be a great way for companies to gain exposure to the open market and continue their growth. However, in recent years, there have been a number of cases where much anticipated IPOs have failed to live up to expectations of the market. This is especially true of IPOs that follow the SPAC format.

Therefore, it is important to do extensive research to make sure a company has substantial backing to justify pre-IPO valuations and general investor hype. The three companies listed above should be seriously considered by investors wanting to make a sizable profit.