Despite all the innumerable dangers that have occurred in 2020 so far, it has surprisingly turned out to be a blockbuster year for IPOs. So much so that some compare the current frenzy to the IPO boom of 1999.
Indeed, last week's highly anticipated Snowflake debut as a public company made the technology company the most highly regarded software IPO ever after its first day of trading. Not surprisingly, the Renaissance IPO ETF (NYSE :), which tracks a basket of US companies listed recently, comes out this year. For its part, it is up about 3% over the same period.
The busy month for new listings is on track, with data analytics firm Palantir Technologies (NYSE 🙂 and workplace software vendor Asana (NYSE 🙂 slated to go public later this month. Home rental company Airbnb, on-demand delivery provider DoorDash, and OpenDoor, a real estate marketplace, are some of the other startups expected to go public before the end of 2020.
Below we will focus on three technical unicorns, which, thanks to rapid growth, have the potential to become market leaders in their respective fields.
1. Snowflake
Snowflake (NYSE 🙂 caused a furore on September 16 when it became the biggest tech IPO of the year. The cloud-based data storage and analytics provider costs $ 120 per share – well above its original price range of $ 75 to $ 85 per share.
Shares of the cloud database vendor more than on their first day of trading, ending 112%, at $ 253.93. At one point, they were up as much as 166% and hit a maximum of $ 319.
In total, Snowflake raised nearly $ 3.4 billion from its offering, making it the largest software IPO in history, easily surpassing VMware's (NYSE 🙂 market debut in 2007, which was about $ 1 billion yielded.
The stock, which has cooled a bit in the days following its debut, closed at $ 235.16 on Tuesday, giving the San Mateo, California-based software-as-a-service company a market cap of about $ 65 billion. has.
Snowflake, whose data warehouse software helps companies manage and share massive amounts of information, received a vote of confidence from Warren Buffet's Berkshire Hathaway (NYSE :), (NYSE 🙂 and cloud giant Salesforce (NYSE 🙂 through two divorcees of $ 250 million investments shortly before they go public.
The cloud data warehousing company saw its revenue increase 133% to $ 242 million in the first six months of 2020, driven by a robust expansion in customer base, which increased 101% to 3,117. It currently counts seven of the Fortune 10 as customers and 146 of the Fortune 500 companies.
But, like many of his colleagues, Snowflake is not yet profitable. It lost $ 171.3 million in the first half of the year.
We expect Snowflake to continue blooming thanks to its vigorous growth. Stll, his sky-high rating leaves little room for error.
2. JFrog
JFrog (NASDAQ 🙂 added to the tech IPO hysteria this month when it made its market debut on September 16. The developer of cloud-based software tools cost $ 44 per share – an increase from its original price range of $ 33 to $ 37 per share.
The enterprise software company briefly saw its stock rise 75% to $ 77.00 on the first day of trading, before closing higher by 47.2% at $ 64.79. JFrog raised more than $ 350 million in the process.
The stock, which continued to rise in the days following the IPO, came in at $ 77.71 last night, putting the Sunnyvale, California-based automatic software updates company to a valuation of approximately $ 6.9 billion.
The DevOps platform helps companies and developers roll out software updates and already has a number of high profile clients, including Amazon (NASDAQ :), Netflix (NASDAQ :), Adobe (NASDAQ 🙂 and American Express (NYSE: ).
Jfrog's sales increased 50% year-on-year to $ 69.3 million in the first half of 2020. While the software company is still unprofitable, its losses have declined – from $ 2.1 million in the first half from 2019 to just $ 426,000 in the first half of 2020.
Despite high valuation levels, we expect Jfrog to remain one of the best performing business software names in the market, largely due to faster revenue growth and customer acquisition.
At the end of June, JFrog had approximately 5,800 companies and organizations as clients, including 75% of the Fortune 500 companies.
3. Unity Software
Unity Software (NYSE :), which provides tools for creating video games, made its public market debut on September 18. The San Francisco, California-based company cost $ 52 per share, which was higher than the original price range of $ 34 to $ 42 per share.
On the first day of trading, shares of the video game software developer were up 44% before reaching 31.4% at $ 68.35, bringing in $ 1.3 billion in revenues.
The stock, which has remained warm in the days following the IPO, closed at $ 84.82 yesterday, bringing its market cap to $ 22.3 billion.
Unity Software 30 Min Chart
Unity's revenues for the first six months of 2020 are up 39% from the same period last year to $ 351.3 million, reflecting growing demand for the video game development platform. The number of customers spending $ 100,000 or more at the end of June was 716, compared to 515 a year ago.
The company said that more than half of the top 1,000 mobile games in Apple & # 39; s App Store and Google Play in 2019 were created using its platform. "Pokemon Go", "Call of Duty: Mobile" and "Iron Man VR" are among the most famous games developed with Unity software.
Like many of the red-hot tech names that recently debuted on Wall Street, Unity is not yet a profitable company. It made a net loss of $ 54.1 million in the first half of this year, down from the loss of $ 67.1 million in the same period a year earlier.
Unity Software's stock still looks attractive going forward, given the high demand for video game development tools. The company's platform had 1.5 million monthly active users worldwide as of the end of June 2020.
