The IPOs to Look Out for in 2021
As the year 2020 draws to a close and with it, a nervous global economy due to the global COVID-19 pandemic, one of the more positive outcomes that emerged from a turbulent financial year was that the 2020 IPO season was deemed to be a very good one. This will undoubtedly give investors confidence to be suitably bullish for those companies planning to move from being privately owned to publicly traded in 2021.
Recent history has demonstrated that successful tech industry stocks realise exponential growth and consistently outweigh other sectors. One only has to look at some of the largest and best-known companies in the world like Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN, Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) to understand that investing in the right technology at the right time will reap substantial returns.
The 2021 IPO season is offering some big names in technology, which will dominate again, but investors will also be looking at those companies that have flourished and will continue to do so, during the pandemic and after the pandemic. Indeed, because of COVID-19, health tech has moved inexorably to the front of the queue for many investors.
Here are our top five IPO tips for educated investors looking for long term windfalls in 2021.
Coinbase is not just a crypto firm, it is a full 360 FinTech story which handles payments, debit cards, trades and VC investments.
It is now a recognised brand with a strong following. Indeed, in the world of crypto, the “Coinbase effect” is fast becoming a colloquialism.
Coinbase is the most respected platform to access the crypto market. All coins listed there get an immediate and huge recognition by cryptocurrency adopters.
Blockchain technology is becoming institutional and besides the recent rise of Bitcoin, cryptocurrencies became an attractive asset class for many institutional investors, mostly in times when liquidity was lacking.
Coinbase offers a good option for investors to get exposure to the asset class. As investors are looking to enter the space, waiting to find the best fit, Coinbase sits at the hedge of retail and institutional clients. High margins and the huge potential of monetisation for its client base make it a definite company to add to investment portfolios.
Uipath is a global software company that develops a platform for robotic process automation and is one of the market leaders in its field.
The current COVID-19 pandemic has hastened the need for automation and has, in turn, brought a huge growth potential for Uipath. COVID-19 was the best challenge to test the company’s automation and its ability for remote working.
The company disclosed that it has over $400 million in annual recurring revenue, a metric that measures its predictable revenue from subscriptions and returning customers. This is music to the ears of investors as strong revenue, growth, having major clients (Uipath boasts 6300 clients worldwide) and diversity across industries are all hallmarks of a company with great potential.
In addition to this, Uipath is now a free cash flow positive company, which is a wonderful thing for a company in the tech sector. “We are on the verge of becoming free cash flow positive very soon, maybe even starting with this quarter, so we don’t need the money from an operational perspective. It was a strategic fundraise”, Co-founder Daniel Dines said, commenting on their recent fundraise.
Public markets are attracted to InsurTech stories (see the Lemonade example) and currently, there are not many listed players in the space. Oscar Health is a top player in the field, with more than 420,000 members across its individual, Medicare Advantage and small group products available in 15 states and 29 US markets.
Oscar positions itself as the first direct-to-consumer health insurance company, where the customer is at the centre of the value proposition. The company’s Net Promoter Score is 36, which compares extremely favourably to the industry average of -12. App engagement and downloads are also way higher than industry standards.
The company has also increased partnerships with strategic players, such as their partnership with CIGNA, to provide commercial health solutions to small businesses.
Oscar also has an aggressive expansion plan to deploy its solutions in many other states in the US. In July this year, the company announced that it is expanding its health insurance products into four new states and 19 new markets to sell coverage for individuals and families in 2021.
Better is a company which has streamlined the mortgage process, eliminating fees and unnecessary steps in an attempt to provide people with a more efficient and easier way of buying a home. This has translated into the best rates available. By fully digitalising the process with full automation, it is destined for great things.
The mortgage market is increasing, and loans are in high demand due to the low-interest rates during the pandemic.
The company is focussing on diversity, single women, and minorities – in short, those who have not been served well by traditional banks historically.
Indigo Ag took the third spot on CNBC’s Disruptor 50 list. The $3.5 billion AgroTech company uses AI and machine learning technologies to advance the field of agronomics and contribute to healthier farms across the US.
Looking at the big picture, this is the right company, using the right technologies, in the right space, at the right time – with a combination of technology and sustainability. It is doing this by delivering value for growers and the environment while expanding consumer choice.
It is also disrupting the full value chain in one of the most traditional and archaic industries. It might be one of the first AgroTech companies attracting interest from ESG investment managers.
*NO INVESTMENT ADVICE – The content is for informational purposes only and should not be construed as financial advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Fiorenzo Manganiello or Nessim Sariel-Gaon or LIAN Group or any third-party service provider to buy or sell any securities or other financial instruments.