The long-awaited 2020 unicorn stampede is finally here. The growing list includes some of the most highly anticipated names of the year, with at least five expected to raise more than $1 billion in December listings. These behemoths aren’t the only ones aiming for year-end IPOs, though. November filing activity has already reached its highest level in over two decades, with 24 companies joining the IPO pipeline so far this month.
Restaurant delivery service DoorDash (DASH) kicked off the new additions, filing for an estimated $2 billion IPO. Thanks to quarantined consumers taking out instead of dining in, revenue more than tripled in the 9mo20 to $1.9 billion, and EBITDA and free cash flow both swung positive. DoorDash is the category leader in US local food delivery logistics, boasting a 50% share in the US.
The largest of the bunch, home-sharing startup Airbnb (ABNB) filed for an estimated $3 billion IPO. Thanks to its asset-light model and global network, Airbnb has been the fastest hospitality company to rebound from COVID-19, despite monthly bookings still not reaching pre-shutdown levels. While unprofitable, the company has posted positive free cash flow since 2016.
Three more unicorns are on file to raise $1 billion: ultra-bargain e-commerce platform Wish (WISH), online gaming and co-experience platform Roblox (RBLX), and "buy-now-pay-later" firm Affirm Holdings (AFRM).
| Unicorns Stampede into the 2020 IPO Market | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| DoorDash (DASH) | $2,000M | Technology | Goldman |
| North America's largest online restaurant delivery service. | |||
| Airbnb (ABNB) | $3,000M | Technology | Morgan Stanley |
| Provides a platform for booking short-term stays from a global network of locals. | |||
| Wish (WISH) | $1,000M | Technology | Goldman |
| Provides an e-commerce platform for ultra-bargain unbranded merchandise. | |||
| Roblox (RBLX) | $1,000M | Communication Services | Goldman |
| Online video game development and interactive co-experience platform. | |||
| Affirm (AFRM) | $1,000M | Financials | Morgan Stanley |
| Offers "buy now pay later" loans for online purchases. | |||
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The influx of new filers comes as many companies had to readjust their IPO timelines following the market shutdown earlier this year. Now, the time is right. Recent IPOs have been well received, with 2020 IPOs averaging a 30% first-day return, and a 51% return from offer as of Friday's close. Both peer valuation multiples and IPO enthusiasm have reached dizzying heights, and broader IPO market returns are strong, with the Renaissance IPO Index up 88% year-to-date, compared to 10% for the S&P 500.
