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What are public companies and how do they differ from private companies?

Public companies differ from private companies in that their shares are listed on stock exchanges and the public has access to purchase shares of these companies at the market price, while public companies, in turn, have the opportunity to raise capital from the public.

Private companies use their own capital or arrange financing rounds within the framework of Private Equity transactions.

At the same time, both public and private companies can use debt financing.

Thus, public companies, in contrast to private ones, have a much wider pool of investors. Investors in non-public companies also usually have a say in decision-making or have a greater degree of influence on the business decisions made by the company.

Another important difference between public companies is the requirement to publish financial results. The regulator obliges public companies to report their financial results on a quarterly, half-yearly and full-year basis. This is necessary so that a wide range of investors can make an informed and realistic investment decision.

Private companies most often go public through an initial public offering of their shares. IPO is a long and costly process for companies, therefore, recently it has gained popularity to enter the public market through SPAC companies, as it allows them to become a public company faster and cheaper and attract money from more investors.

In this case, a public company, if necessary, can become private again. Most often this happens in an M&A transaction, when a larger company wants to acquire a highly focused, fast-growing startup to diversify its business.

Public companies have more responsibility, both in terms of financial reporting and reputation and positioning. Negative litigation, reaction from dissatisfied customers, and so on can directly affect the value of a company's stock, reducing its value.

From an investment point of view, it is important to note the timing of the transactions. Investments in public companies are the most liquid, since the investor can decide for himself when to buy shares in the company and when to sell them. In the case of investments in private companies, the investor can purchase shares in the framework of financing rounds and in order to sell his shares he needs to wait for the next round and be able to sell his shares to other investors.

Despite a longer horizon of being directly as an investor, investments in private companies can bring high returns. It is necessary to correctly select the companies that have the highest potential. As a rule, fast-growing companies, most often from the IT sector, are of interest.

So, in order to invest in public companies, a lot of capital is not required and the investment period is determined by the investor himself, and in the case of private companies, much larger amounts and terms are required. Thus, you can invest in both private and public companies, the choice depends on the investor's capabilities and planning horizon.

20 hottest IPOs of 2021

The initial public offering (IPO) market overcame a lightning securities industry in early 2020, returning to levels not seen since the dot-com boom. In 2021, many companies are also planning to attract Wall Street to raise much-needed capital.

What were the highlights of 2020? Zoominfo (ZI) made an IPO worth $ 8.2 billion. Snowflake (SNOW) hit the markets in September, making the largest software IPO in history with a valuation of $ 33.2 billion - an offer that caught the attention of even the super conservative Warren Buffett. Airbnb (ABNB) completed its blockbuster placement by raising $ 3.7 billion after the share price was raised to $ 68.00, well above the expected range.

Overall, last year's IPO has shown fantastic results, both on time and after the IPO. The Renaissance IPO (IPO) ETF grew 119% in 2020, compared to the S&P's 14.3% growth, the best (best year) ever. The median return on US ipos in 2020 was 75.4%, up from 24.4% in 2019 and a loss of -1.9% in 2018.

Upcoming IPOs are also promising big returns for investors.

Why do we think so? There are several main reasons:

Mega-trends in digital transformation are pushing more and more companies into public markets. Many companies understand that in order to remain competitive, they must implement modern technologies such as cloud computing, analytics and artificial intelligence, which means that in 2021 the IPO market in the technology sector will become even more dynamic;
In the past decade, venture capital funds have been literally flooded with cash. They spent this money investing billions of dollars in thousands of startups, which allowed them to scale very quickly. The next logical step: ipos, in which even more capital will be invested, which will give their founders, employees and venture capitalists the opportunity to earn even more;
Thanks to the efforts of online brokers like Robinhood, stock trading has become free (or almost free) for most investors. This has helped attract a huge number of young investors looking for rapid growth opportunities such as ipos;
Minimum bank interest rates (and sometimes negative).

According to factset data, in the third quarter of 2020, the number of ipos increased by 195% compared to 2019. Given this activity, does the IPO market still have momentum in 2021? Both analysts and investors think so!

Below is a list of the most anticipated, hottest, and most profitable, in my opinion, upcoming ipos in 2021.

1. Affirm

IPO release date: January 13, 2021
Estimated IPO volume: $ 1.39 billion, placement price: $ 49.00

Affirm (NASDAQ: AFRM): 1st, and perhaps the most anticipated debut of 2021, has already entered the market on January 13, 2021 and almost doubled on the first day of trading.

Although the name of the company may not be a household name, it is the brainchild of Max Levchin, one of the co-founders of the paypal payment processing company (NASDAQ: PYPL). An online lender provides financing and installments for customer purchases on e-commerce sites.

After initially planning the price of its shares from $ 33 to $ 38, strong investor interest pushed this range up to $ 41- $ 44 per share. On the eve of its debut, Affirm priced them above the upper limit of the $ 49 range. Even that was not enough to dampen investor enthusiasm..

Affirm offered 24.6 million shares to investors. If the underwriters exercise their right to sell an additional 3.69 million shares, the offer would raise $ 1.38 billion, with the company valued at approximately $ 23 billion.

The company has attracted over 5.6 million users and its sales base includes the likes of Walmart (WMT), Wayfair (W), and even the ascendant Peloton Interactive (PTON).

Affirm has raised $ 800 million to date, including a 2019 funding round in which venture capitalists and celebrities (such as Ashton Kutcher) raised over $ 300 million.

2. Motorsports Games

Release date: January 13, 2021
Estimated IPO volume: $ 60 million, placement price: $ 20.00

The Motorsport Games had an impressive debut on Wednesday. The stock opened at $ 35 and peaked at $ 38, up 90% from its original offering.

We are just overwhelmed by [the IPO]. I am overwhelmed with positive emotions that the investor community has accepted our vision of the business, said Dmitry Kozko, CEO of Motorsport Games.

Motorsport Games raised $ 60 million after selling 3 million shares for $ 20 each.

Motorsport Games' goal is to become a globally recognized brand of racing games and esports. All we want to do is make people happy with racing games, said Kozko.

Motorsport Games is the official developer and owner of the Nascar racing video game franchise. In May, the company signed a multi-year licensing agreement to exclusively develop and publish video games for the British Touring Car Championship.

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3. Poshmark

Release date: January 14, 2021
Estimated IPO volume: $ 3 billion, IPO price: $ 42.00

Online clothing retailer Poshmark closed its first day of trading with more than 150% gains during its market debut on Thursday, January 14th.

The stock started trading at $ 97.50. Poshmark valued its IPO at $ 42 per share on Wednesday, giving the company an initial valuation of over $ 3 billion.

The company previously announced that it plans to sell the shares at prices ranging from $ 35 to $ 39. In the last round of Serie D in November 2017, she was valued at nearly $ 600 million.

Poshmark listing was headed by Morgan Stanley, Goldman Sachs Group Inc. And Barclays Plc.

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Poshmark, founded in 2011, is an online retailer of used clothing, footwear and accessories. Similar to ebay and Etsy, Poshmark connects buyers with sellers b makes money by taking a cut from every transaction.

The popularity of online shopping sites for used goods among consumers has grown exponentially in recent years, and a number of players are looking to get their share in this giant segment: among them the luxury website therealreal, the stockx sneaker reseller and the thredup virtual thrift store, which privately filed an application for a public offering last year.

4. Playtika

Release date: January 15, 2021
Estimated IPO volume: $ 1.9 billion, IPO price: $ 27.00

Playtika offered 69.5 million shares at $ 27 each, which is higher than the initial estimated range of $ 22 to $ 24.

Playtika shares jumped 17.1% to close at $ 31.62 on Day 1.

Based in Herzliya, Israel, the company has created nine games that are among the top 100 grossing mobile games in the United States. This data is based on total in-app purchases from Google Android, Apple (AAPL) and Alphabet (GOOGL.

5. Roblox

Expected date: February 2021.
Estimated IPO volume: $ 8 billion

The history of online gaming ipos has not been the best: just look at the horrific results of a company including the creator of farmville Zynga (ZNGA) and King Digital Entertainment, creator of the Candy Crush franchise.

But Roblox stands out from its competitors - it's an online gaming platform and game creation system - and the company rightly believes it can counter that trend. First of all, it is aimed at children; about a quarter of users are under the age of 9, and 29% are between the ages of 9 and 12.

In addition, the company has built a platform that greatly simplifies game development. The platform employs over 960,000 developers who have done over 18 million tests

Roblox currently boasts over 31.1 million daily active users in over 180 countries, and these users have spent a total of 22.2 billion hours playing games on the Roblox platform in the past nine months.

During the same period, the company's revenue jumped 68% over the same period last year to $ 588.7 million.

Roblox recently applied for S-1. The IPO was expected to take place in the first half of December 2020, but the company pushed it back to early 2021. The expected valuation is $ 8 billion - double what Roblox was worth in the February Series G funding round.

6. Coinbase

Expected date: February 2021.
Estimated IPO volume: over $ 8 billion

Coinbase, which owns and operates the largest cryptocurrency exchange in the United States, has privately submitted a draft IPO registration statement, which is expected to be offered in February.

Cryptocurrencies like Bitcoin have recently hit record highs. Some investors flocked there because of concerns about traditional currencies as a result of extremely low interest rates and loose fiscal policies around the world. Institutional investors including Paul Tudor Jones and Stanley Druckenmiller have been attracted to this space. And companies like paypal and Square (SQ) have helped mainstream cryptocurrencies by allowing users to buy them.

Founded in 2012, Coinbase now has over 35 million investors in over 100 countries. The company's system is quite easy to use and provides important services such as storing digital tokens.

We'll see for sure when the S-1 comes out, but rumor has it that Coinbase is making a profit. And that seems reasonable given the rise of cryptocurrencies and the low capital requirement for the digital market.

Coinbase's most recent funding round took place in October 2018, when it raised $ 300 million at a $ 8 billion valuation.

7. Bumble

Expected IPO date: February 2021.
Estimated IPO volume: from $ 6 to $ 8 billion

Bumble is a unique dating app that offers three possibilities. Bumble Date is a Tinder-style dating app where women take the first step in making any kind of connection. There is also a "BFF mode" that allows people to look for friends. And then there's Bumble Bizz, a networking system similar to Microsoft's linkedin (MSFT).

In 2020, Bumble reached over 100 million users, monetizing those users through ads as well as a premium subscription option.

Unsurprisingly, Bumble has become a serious competitor to Tinder. CEO and founder Whitney Wolfe founded the firm in 2014 after she worked on the hugely popular dating app she also co-founded, but left and later sued for sexual harassment and discrimination.

Russian billionaire Andrei Andreev (who already had his own dating app Badoo) first approached Wolfe with a request to create a dating app, and received $ 10 million to do so. Five years later, in 2019, Blackstone Group (BX) spent $ 3 billion buying a majority stake in Bumble, while Wolfe remained as CEO. This was an unusual move for the private equity giant, which has mostly invested in traditional companies, but perhaps Blackstone realized it needed to become more active in the digital world.

8. Petco

IPO date: January 14, 2021
IPO volume: $ 864 million, placement price - $ 18.00

The pet retailer Petco (WOOF) will not become as in-demand and popular as many tech ones. But it is one of the upcoming ipos that investors should keep a close eye on, given that it is a serious brand with a presence in over 1,500 locations.

Petco is very familiar with how to go public as it has done so three times since its inception: in 1994, in 2000 and again in 2002. IPO # 4 took place on January 14, 2021.

The IPO price was raised from $ 14- $ 17 per share to $ 18, the 1st deal was made at $ 29.30 and reached $ 31.08 on the first day of trading - 72% growth.

Petco has some problems, such as competition from Amazon.com as well as online pet store Chewy (CHWY).

However, Petco is strengthening its image by renaming itself "Petco, The Health + Wellness Co." This rebranding included placing more healthy products on shelves and establishing veterinary clinics in their stores, as well as the ability to sign up for Petco Core Care's annual membership plan. This is a smart strategy considering pet owners are willing to spend large sums of money on medications and treatments.

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9. Uipath

Expected IPO date: February 2021.
Estimated IPO volume: more than $ 15 billion

Daniel Dines became a superstar programmer at Microsft. In fact, he always wanted to start his own company - and he did it, focusing on creating technologies that help integration and outsourcing.

For many years, things did not go well. The competition was intense. The margin was low.

But in 2015, Dines changed the name of his company to uipath and simultaneously changed its strategy. Dines has worked hard to develop a robotic process automation (RPA) platform that helps automate tedious business tasks and processes. This revolutionary step has sparked tremendous growth for the company.

Today, uipath is a $ 10.2 billion company that has received another $ 255 million round of funding from leading investors such as Accel, Coatue Management, Dragoneer Investment Group, Sequoia Capital and Tiger Global. Revenue exceeded $ 400 million in 2020.

10. Applovin

Expected IPO date: early 2021.
Estimated IPO volume: currently not defined

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Applovin is a rarity among upcoming ipos. Not because the company is engaged in some unusual business or has a unique history of its founder.

No, applovin stands out for being profitable and earning money since it was founded in 2012.

For example, in 2019, only about a quarter of ipos made a profit. In 2018, this figure was closer to 20%. Applovin raised significant amounts of capital: for example, in 2018 KKR & Co. (KKR) announced a $ 400 million investment at a $ 2 billion valuation.

Applovin has built an extensive platform to help game developers create, manage and monetize their apps. The company has also set up its own game studio called Lion Studios.

The company currently has 750 million daily active users (DAU) and monthly coverage of over 2 billion devices. The growth prospects are also promising. The success of the Unity IPO in September 2020, as well as the success of video game promotions in other areas, also bodes well for the applovin IPO, which is expected in early 2021.

11. Instacart

Expected IPO timing: first half of 2021.
Estimated IPO volume: currently not defined

In 2010, Instacart founder Apurva Mehta left his post at Amazon.com (AMZN) to relocate to San Francisco and start his own venture. He ran into a lot of problems trying 20 different products without success.

But in the end he stumbled upon something promising: an on-demand network for the delivery of groceries and other goods. It was based on an application that connected sellers with buyers.

The pandemic has changed the game for Instacart in 2020: COVID-19 has prompted millions of people to use online app-based delivery services.

Instacart is still fundraising, including another $ 200 million round of funding from Valiant Peregrine Fund and D1 Capital Partners following a $ 225 million already raised in June 2020 led by DST Global and General Catalyst with D1's participation.

The latest round of funding estimates the company at $ 17.7 billion. So while there is no exact IPO estimate, Instacart's IPO should be one of the largest in 2021.

12. Thoughtspot

Expected date of the IPO: Autumn 2021.
Estimated IPO volume: currently not defined

Thoughtspot founder Ajit Singh actually built two billion dollar companies.

Singh co-founded Nutanix (NTNX), an approximately $ 5 billion cloud infrastructure and services firm, in 2009. He believed that cloud computing would become a mega-trend and that enterprises would need large-scale infrastructure software (and he was absolutely right). Nutanix eventually went public in September 2016.

But that was not enough for Singh. He left the company in 2012 to pursue another huge technology area: analytics and artificial intelligence, and founded thoughtspot, whose platform allowed organizations to integrate multiple data sources and create sophisticated dashboards.

Co-founder of the company, Amit Prakash, has extensive experience in analytics, including being a leader in the Google Adsense engineering team. Prior to that, he worked as a founding engineer for Microsoft Bing, where he helped develop page ranking algorithms.

There have been many deals in the analytics market over the past couple of years. Among the highlights are the $ 15.7 billion purchase by Salesforce.com (CRM) of Tableau in the summer of 2019 and the purchase of Looker by Alphabet (GOOGL) for $ 2.6 billion around the same time.

While there are no clear estimates of thoughtspot's IPO volume to date, its last round of funding was Series E in August 2019, in which it raised $ 248 million at a valuation of nearly $ 2 billion.

13. Robinhood

Expected IPO date: 2021
Estimated IPO volume: currently not defined

Robinhood was founded in 2013 with a lot of skepticism. Did we really need another online broker in an already crowded market?

There may not have been room for another regular participant, but there was a need for new innovative approaches. Robinhood has focused on developing an attractive, easy-to-use app, which Apple's ios version (AAPL) currently has an impressive 4.8-star rating.

Robinhood has also been and continues to be overly aggressive with its business model, offering zero commission deals and no minimum amounts for investment accounts.

The COVID-19 pandemic, in turn, has had a major positive impact on the company's growth. In 2020, the app has grown to 13 million users - more and more people have become interested in promotions after the spring price crash.

Robinhood's IPO is expected to take place in 2021, and it may not be without some "drama": the company was already under regulatory scrutiny and ultimately paid $ 65 million to settle SEC allegations that it introduced clients into misconception about their potential earnings.

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14. Oscar Health

Expected IPO date: 2021
Estimated IPO volume: currently not defined

Oscar Health's origins date back to 2012, when Harvard business classmates Mario Schlosser, Kevin Nazemi, and Josh Kushner (brother of Jared Kushner, son-in-law of US President Donald Trump) came up with the idea to create a new type of health insurance company based on advanced digital technologies. The timing was right as Oscar Health benefits from the implementation of the US Affordable Care Act (ACA).

Schlosser and Kushner had personal reasons for starting the company. Schlosser had a bad experience with hospital bills.

In total, Oscar Health has about 420,000 clients, who generally positively evaluated its services - a major achievement in this area.

Another potential growth driver was the strategic partnership with Cigna (CI) announced in early October 2020 for small business insurance.

In September, the company announced that it had hired underwriting investment banks to prepare for a 2021 offering.

15. Nextdoor

Expected IPO date: 2021
Estimated IPO volume: from $ 4 to $ 5 billion

Nextdoor is a social network for your neighborhood founded in 2008. The site allows you to make connections, is useful for sending or receiving recommendations, organizing events, and posting alerts. You can even sell various items on this platform.

Nextdoor, which is available in 11 countries in 268,000 neighborhoods, including about a quarter of US households, was founded by several Silicon Valley entrepreneurs who were able to quickly get venture backing from companies such as Shasta Ventures and Benchmark.

Sara Friar, formerly of Square's CFO, took over as CEO of Nextdoor in late 2018. She has also served as CEO of Salesforce.com and Lead Software Analyst at Goldman Sachs (GS).

16. Ascensus

Expected IPO date: 2021
Estimated IPO volume: $ 3 billion

Ascensus is one of the oldest companies on the list of upcoming ipos for 2021, founded in 1980 as The Barclay Group (not to be confused with Barclays) to provide services to the 401 (k) market - American corporate pension funds. This happened just as the United States was about to make a massive shift in retirement planning, from pensions to self-investment.

Since then, Ascensus has diversified its business, primarily through an aggressive M&A strategy. The company manages over $ 327 billion in assets, employs over 3,700 employees, and has an extensive network of financial advisors.

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Ascensus has been constantly investing in improving its technology lately. One such example was the launch of a personalized system that automates the proposal process.

Ascensus has already hired Wall Street bankers - Barclays and Goldman Sachs - to draft the listing. The deal is expected to hit $ 3 billion and hit the markets sometime in 2021.

17. Stripe

Expected IPO date: 2021
Estimated IPO volume: currently not defined

One of the hottest technologies that investors should watch out for in 2021 is digital payments. In 2020, exchanging hard currency suddenly poses a much greater risk, and exchanging money over the internet not only eliminates this risk, but also facilitates faster transactions.

One company looking to capitalize on this trend is Stripe, which creates financial instruments and economic infrastructure for the Internet, in other words, allows companies of all kinds and sizes to accept digital payments. Stripe's customers range from online startups to Salesforce.com (CRM), with whom the company struck a deal in September 2020 to create a turnkey payment solution for its Digital 360 product.

Deals like these bring Stripe even closer to an IPO, although a date for its public debut has yet to be determined. With a valuation of $ 36 billion that continues to grow all the time, it is increasingly clear that Stripe will be one of the largest and hottest ipos in 2021.

18. Better. com

Expected IPO date: early 2021.
Estimated IPO volume: $ 3 billion

The housing market has been warming up throughout 2020 as people locked up in their homes realized they wanted to own more real estate. Better.com makes it easy for potential homeowners to find and pay for their dream home by streamlining the mortgage and loan repayment process. This is a very convenient service that customers are happy to use, which in turn makes Better.com one of the largest mortgage lenders in the United States. Better.com is exploring the possibility of an IPO in early 2021 with a valuation of $ 4 billion.

19. Atotech

Expected IPO date: 2021
Estimated IPO volume: $ 1 billion

The IPO was originally expected to take place in the first half of 2020, but Atotech, owned by the Carlyle Group, has postponed its debut due to the coronavirus pandemic and fears it would affect its valuation. The company makes specialty chemicals and equipment that can be found in almost all devices, from smartphones to communications infrastructure.

The German firm filed an F-1 filing with the Securities and Exchange Commission in January 2020, reporting consolidated net losses of $ 23.7 million in 2018 on $ 1.2 billion in revenue. For the nine months ended September 2019, the company had net income of $ 12 million on revenues of $ 877 million, and its IPO volume could exceed $ 1 billion.

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20. Ant Group

Expected IPO date: 2021
Estimated IPO volume: $ 34.5 billion - the world's largest planned IPO

Ant Group, formerly known as Ant Financial and Alipay, is a subsidiary of China's Alibaba Group. The group owns China's largest digital payment platform, Alipay, which serves over one billion users and 80 million merchants, and the total payments volume (TPV) reached RMB 118 trillion in June 2020.

In October 2020, Ant Group was set to raise $ 34.5 billion in the largest IPO in the world at the time, valuing the company at $ 313 billion.

In November 2020, the company announced the suspension of its IPO on the Shanghai and Hong Kong stock exchanges. The Wall Street Journal reported that China's Supreme Leader Xi Jinping personally decided to suspend Ant Group's initial public offering.

On December 26, 2020, the People's Bank of China ordered Ant Group to amend its business and schedule its implementation. China's central bank also summoned Ant executives and said the group lacks an effective governance mechanism, ignores regulatory requirements and is involved in regulatory arbitration.

We look forward to the successful resolution of this purely political conflict between the company and the country's leadership and the release of this IPO, although the latest news related to Ant Group leaves less and less optimism.