Technology companies conduce to outperform other industries in the United States by the end of 2020. In the past five years, the Nasdaq 100 index, which tracks the biggest tech names in the US, has gained by more than 150% while the S&P 500 and Dow Jones have gained by only 60%. Some companies like Shopify, Square, and Facebook have grown from relatively small online startups a decade ago to become some of the biggest industry changers. Here will look at some of the top upcoming tech IPOs you should be aware of.
Nasdaq 100 has outperformed the S&P 500 and Dow Jones.
Industry – Fintech
Raised – $1.3 billion
Valuation – $14.5 billion
Chime is an online fintech company, started in 2013 to transform the way people interact with banks. The company allows people to open their accounts online and access multiple services. Some of its key services are advanced salaries, fee-free overdrafts, and mobile payments. It has three accounts; spending, credit builder, and a savings.
In the past few years, Chime has been in its growth phase. The company has added more than 5 million customers and raised more than $1.3 billion. Its investors are Menlo Ventures, DST Global, and Homebrew. Chime reached more than 500 employees as well .
The business makes money by charging a fee whenever customers use its debit cards. Specifically, the firm takes a 1.5% charge whenever its customer shops online or in a store.
Chime has not confirmed the date of going public, yet. Based on its strong growth and the growing appetite for fintech companies, the management may decide to take it to the stock market in the next few years.
As a public company, Chime faces significant challenges. For one, it will need to continue adding more customers to justify the valuation. Second, it will need to be viewed as a technology company and not a bank. Finally, the neo banking industry is highly competitive. Among the leading companies offering the services are Goldman Sach Marcus, Digit, Zero, and MoneyLion.
Industry – ESports
Raised – $3.4 billion
Valuation – $17.3 billion
Gaming companies have been among the best winners of the coronavirus pandemic as more people stay at home. Indeed, shares of companies like Tencent, Electronic Arts, and Take-Two Interactive have done exceptionally well. At the same time, some gaming companies like Unity Software have already gone public.
This has led many to speculate that Epic Games will be next. Epic Games is a company well-known for its Fortnite game. Unknown to many, the company is also a leading player in the gaming industry because of its Unreal Engine product that helps developers build their games.
Epic Games has raised more than $3.4 billion, mostly from Tencent, Lightspeed Ventures, and Fidelity. The company has millions of users around the world and makes more than $4 billion a year and more than $750 million in earnings before interest, depreciation, and amortization. Also, the firm is involved in a battle with Apple and Google about their app store policies and commissions.
Epic Games has not confirmed when it will go public, but investors believe it will do so soon. If it does, some of the reasons to invest in it will be the popularity of Fortnite, its revenue and high margins, and its unreal engine platform.
Industry – Space technology
Amount raised – $5.6 billion
Valuation – $46 billion
SpaceX is a technology company that has successfully disrupted the space industry by saving the amount of money spent to launch rockets. It is also developing spacecrafts that will be able to take people to space in the future. Indeed, the company has already received deposits from some of the enthusiasts.
Over the years, SpaceX has raised more than $5.6 billion and is now the third-biggest technology company in the world after Bytendance and Didi Chuxing. Among the firm’s biggest investors are Founders Fund, Draper, and Rothenberg Ventures.
SpaceX has committed to going public in the future, but it has not indicated when it will do so. However, it is one of the most anticipated companies, mostly because of its CEO, Elon Musk. Also, interest in the space industry has been growing, as evidenced by the recent performance of Richard Brunson’s Virgin Galactic.Unlike Galactic, SpaceX has ready customers, including NASA, and has a proven track record in the industry. The company also has been growing its revenue, which has soared to more than $2 billion, according to estimates by Jefferies.