8 Hot Upcoming IPOs to Watch

IPO ahead written on yellow traffic sign with red arrow going up

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last updated 11 October 2023

The initial public offering (IPO) market is starting to show signs of life after an awful drought that lasted nearly two years. Investors have more to look forward to, as well, with several upcoming IPOs likely to roll out over the next several months.

In the third quarter of 2023, there were 30 IPOs that hit the market, raising $7.8 billion, according to Renaissance Capital. This was actually more than for all of 2022. The biggest offering was from Arm Holdings (ARM), one of the world's largest semiconductor companies whose technologies are found in more than 99% of all smartphones worldwide. As for the Arm IPO, it raised $4.87 billion – making it one of the largest IPOs in U.S. history.

Another notable deal was Instacart (CART). Maplebear, the tech company that does business as Instacart, operates a platform to provide on-demand delivery, primarily for groceries. In the first half of 2023, Instacart reported $1.5 billion in revenue, up 31% year-over-year. The company has 7.7 million monthly active orderers.

Then there was the offering from Klaviyo (KVYO), a top provider of online marketing services. In the first six months of 2023, KVYO grew revenue by over 50% to $320.7 million and swung to a profit of $15.2 million. In its IPO, Klaviyo raised $576 million.

On the price charts, however, the offerings have been mostly a disappointment. Arm shares are up about 8% from their IPO price, while Instacart is trading at about 13% below its offering price. Yet Klaviyo has managed to gain 12%.

IPO market rebound could continue

Then again, the market environment remains challenging. Interest rates continue to grind higher and there are growing concerns that the economy is slowing. Despite this, it's encouraging that Wall Street can get deals done.

"While muted filing activity and market turbulence at quarter-end give us pause, we are still encouraged by the return of large tech IPOs, and remain cautiously optimistic about IPO activity gradually accelerating through the rest of 2023 and into 2024," writes Renaissance Capital in its third-quarter IPO review.

Indeed, we're starting to see a few more companies testing the waters, making now the best time to explore the most anticipated upcoming IPOs. I have covered the best upcoming IPOs to watch for Kiplinger for several years now. For this list, I focused on large, more established names that should generate plenty of excitement on Wall Street and Main Street alike.

Data is as of October 11. Where possible, we have provided reported expectations for timelines and/or valuations for the upcoming IPOs.

Topics

Nvidia

1/10

Upcoming IPOs

Swipe to scroll horizontally

Company	Industry	Expected IPO timeline
Fanatics	Online retail	2024
Cerebras Systems	Semiconductor	2024
Waystar Technologies	Computer software	2023
Navan	Travel services	2024
Databricks	Computer software	2024
Intercom	Enterprise software	2023
Stripe	Payment processor	2024
BMC Software	Consulting enterprise software	2023

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2/10

Fanatics

Michael Rubin's entrepreneurial journey started at eight years old when he sold vegetable seeds door-to-door. By age 15, he had opened a formal ski shop. While it ultimately failed, he learned some valuable lessons.

These lessons helped Rubin with his next business – selling closeout athletic equipment. By his early 20s, the business was generating over $50 million in revenues. Rubin then purchased Ryka, a women's athletic shoe company.

As the internet burst on the scene, Rubin wasted little time in capitalizing on the opportunity and founded GSI Commerce, a top e-commerce company. He would eventually sell it to eBay (EBAY) for $2.4 billion. Through this transaction, he was able to maintain ownership of Fanatics.

Rubin realized that the sports licensing market was ripe for disruption. He applied e-commerce technology to the business, but also built sophisticated logistics systems. This allowed Fanatics to obtain exclusives to rights for brands from organizations like the NFL, NBA, MLB, HNL and numerous colleges.

Fanatics has also been aggressive with acquisitions. In the U.S., it purchased trading card company Topps, clothing brand Mitchell & Ness and the domestic assets of online sports betting firm PointsBet. Fanatics currently sports a valuation of about $31 billion.

There are signs that Fanatics is preparing for an IPO. The company recently held an investor day conference and hired Meta Platforms' (META) former head of investor relations.

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3/10

Cerebras Systems

One of the biggest winners of the artificial intelligence (AI) revolution is Nvidia (NVDA). The company's GPUs (graphics processing units) have proven ideal for handling the complex processing of models.

But there are various startups gunning for the lucrative AI chip market.

One of the standouts is Cerebras Systems. The company was founded in 2015 by Andrew Feldman, Gary Lauterbach, Michael James, Sean Lie and Jean-Philippe Fricker. This came after the group sold their prior startup, SeaMicro, to Advanced Micro Devices (AMD) for $334 million.

"Cerebras has built a new class of computer system, designed for the singular purpose of accelerating generative AI work," said Joe Endoso, president at private investment platform Linqto. "The company's flagship product, the CS-2 system, powered by the world's largest and fastest AI processor, makes training large models simple and easy, by avoiding the complexity of distributed computing."

According to research from Next Move Strategy Consulting, the chip market came to about $29 billion last year. The firm predicts that the size will soar to $305 billion by 2030.

In late 2021, Cerebras announced a funding round of $250 million. This brought the total amount of funding since inception to $720 million.

As for its place on this list of the hottest upcoming IPOs, Cerebras could be on tap to go public next year.

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4/10

Waystar Technologies

Waystar Technologies operates a cloud-based platform that helps healthcare organizations manage their payments. The company was created in 2017 through the merger of Navicure and ZirMed.

Then, in 2019, the EQT VIII Fund and the Canada Pension Plan Investment Board acquired a majority equity stake in Waystar, setting a value at $2.7 billion.

With the financial backing, Waystar continued to buy other companies and grow its business. Currently, the firm has over 1 million providers on its platform and processes 2.5 billion transactions per year. The client satisfaction is 96%.

Investors will be happy to hear that this upcoming IPO is likely to happen sometime next year. Recently, Waystar made a confidential filing for a public offering. According to Reuters, the valuation of the company is now about $8 billion.

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5/10

Navan

Founded in 2015, Navan operates a platform that provides travel and expense management for businesses. The company, which changed its name from TripActions earlier this year, leverages next-generation technologies like machine learning and artificial intelligence to lower costs and improve the user experience. It also added ChatGPT technologies that can assist with things like creating personalized itineraries.

When the COVID-19 pandemic emerged, Navan suffered a steep decline in business and the company had to lay off hundreds of employees. But it was able to secure financing – which helped keep the business afloat.

Navan has since made a strong comeback and continues to innovate its platform. For example, the company rolled out its global rapid reimbursements program. This allows employees to get reimbursed within 24 to 48 hours.

The company has also been focused on acquisitions. Some of the deals include Resia and Comtravo – two European-based travel management companies. Then there was the purchase of Reed & Mackay, a provider of services for high-end business travel and events.

In October, Navan announced a $304 million funding at a valuation of $9.2 billion, up two times since 2020. The company also confidentially filed for its upcoming IPO, but an offering is not likely to happen until next year.

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6/10

Databricks

A little more than a decade ago, a group of computer science students at the University of California, Berkeley created Apache Spark, an open-source system meant to manage big data. The platform achieved massive adoption alongside growing needs to use systems, such as artificial intelligence and machine learning.

A few years later, those students would go on to launch Databricks to commercialize the software for enterprises. Over the years, the company has amassed a customer base of more than 7,000, and includes companies like Shell (SHEL), Regeneron Pharmaceuticals (REGN), CVS Health (CVS) and Comcast (CMCSA).

Databricks also has an ecosystem of hundreds of partners, including blue chip stocks Microsoft (MSFT) and Amazon.com (AMZN), as well as consulting company Booz Allen Hamilton (BAH) and Paris-based IT services firm Capgemini (CAPMF).

For many companies, working with data is challenging. Part of this is due to the information being stored in silos. But there are also problems with processing data to get useful insights.

The Databricks platform allows for managing the data regardless of where it is stored. This makes it possible for real-time analytics, which can be crucial for making better decisions.

Databricks has also been creating ChatGPT systems. There are currently more than 1,000 customers for this technology. Databricks recently launched its Dolly large-language model, which is open source. This allows for more control and security for enterprises.

As far as upcoming IPOs go, details around one for Databricks are currently unknown, but there is strong investor interest in the company.

In September, Databricks announced a Series I round of over $500 million at a $43 billion valuation. The investors included firms that typically participate ahead of a public offering, such as T. Rowe Price Associated, Fidelity Management & Research and Franklin Templeton. The round also included participation from Nvidia.

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7/10

Intercom

Founded in 2011, Intercom builds technologies to improve customer engagement for sales, marketing and support. The company has more than 25,000 customers and the platform delivers over 500 million messages per month.

With the uncertainties about the economy, there is definitely more emphasis on customer engagement. As for Intercom, its solution provides personalized communications and has been shown to generate strong ROI (return on investment). For example, digital analytics software firm Amplitude saved $1 million in costs and increased customer engagement rates by at least 25% by using Intercom.

Intercom has been aggressive in working with ChatGPT technology. In March, it announced its Fin service bot, which is powered by OpenAI's GPT-4 platform. There is no setup or training required. Instead, Fin learns how to operate by analyzing company information.

Unlike many other tech startups, Intercom has not raised huge amounts of venture capital funding. The last infusion of capital came in 2018. At the time, the company raised $125 million. In other words, Intercom has been fairly efficient with its funds.

Jaime Moreno de los Rios, who is the chief operating officer of financial products and services firm Secfi, says that the company is on track for an IPO in 2023 or 2024. "They have since seen strong growth and have grown into their last valuation," he said.

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8/10

Stripe

The payments industry is not particularly exciting, but it can be lucrative and the growth prospects look bright as more transactions continue to move online.

A major beneficiary of this is Stripe. Founded in 2010, the company has built an easy-to-use system for online payments. It's only a matter of using a few lines of code.

The founders of the company are brothers: Patrick and John Collison. They got the inspiration for Stripe when they had challenges using existing payments solutions for their startups.

As for the past year, Stripe has had to face difficulties with its business. The company has a large number of startups as customers, which have seen decelerated growth. As a result, Stripe cut 14% of its workforce, or about 1,120 employees.

Despite this, the business remains robust. Consider that about 100 customers manage more than $1 billion in annual payments on the platform.

In March, the company announced a Series I round of funding for over $6.5 billion at a $50 billion valuation. This makes the company one of the most valuable startups in the world.

What about a public offering? It looks like Stripe could be one of the hottest upcoming IPOs to watch for in the near future.

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9/10

BMC Software

Founded in 1980, BMC Software began as a developer of software for IBM (IBM) mainframe systems. Growth was strong, but started to lag at the end of the decade. This is why the company diversified its product line into other categories, such as for Windows systems. A big part of the growth strategy was through acquisitions.

Today, mainframe systems remain a significant segment of the overall business. However, BMC has modernized its offerings, including with artificial intelligence and machine learning capabilities.

BMC also has strong footprints in other important categories like DevOps, AIOps, service management, security, cloud infrastructure management and workflow orchestration. The company has about 86% of the Forbes Global 50 as customers.

The company previously traded as a public stock from 1988 until 2013. It was then taken private in a transaction valued at about $6.9 billion. The acquirers included Bain Capital and Golden Gate Capital. Five years later, private equity firm KKR (KKR) purchased BMC Software for $8.5 billion.

Now it appears that the company will return to the public markets. BMC Software recently made a confidential filing for an IPO. The estimated valuation is at about $14 to $15 billion.

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10/10

Are IPOs a good investment?

IPOs can be a great way to invest in early stage growth companies. And yes, the gains can potentially be massive.

Then again, the risks can be substantial. "Market history is littered with examples of 'hot' IPOs that have gone on to become market duds," said Ed Ciancarelli, senior portfolio manager at The Colony Group. “Lyft, Inc (LYFT) went public at $72 on March of 2019 after pricing above the expected range of $62 to $68 per share. LYFT closed the first day of trading at $78 and has not seen that level since. Such broken IPOs become the victim of an overly exuberant market and unattainable expectations."

So, an IPO should be considered a higher risk category for your portfolio. For example, it may be best to allocate no more than 5% to 10% in these types of investments.

Before investing in an IPO, you might want to wait until the excitement subsides. "Be patient and wait for the stock price to have its inevitable dip prior to investing," said Jeff McClean, CEO at Solidarity Wealth. "Unless you are one of the lucky few who have access to pre-IPO stock at reasonable valuations, patience is the best course."

Moreover, it is a good idea to read the S-1, a regulatory filing that includes important information about the company that is planning to go public. Make sure to focus on the prospectus summary, risk factors and the letter from the founders.

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Tom Taulli has been developing software since the 1980s when he was in high school. He sold his applications to a variety of publications. In college, he started his first company, which focused on the development of e-learning systems. He would go on to create other companies as well, including Hypermart.net that was sold to InfoSpace in 1996. Along the way, Tom has written columns for online publications such as Bloomberg, Forbes, Barron's and Kiplinger. He has also written a variety of books, including Artificial Intelligence Basics: A Non-Technical Introduction. He can be reached on Twitter at @ttaulli.