Stripe’s 2021 story combines two super hot investing trends: IPOs and fintech services.
2021 is set to be another huge year for initial public offerings (IPOs), and Stripe stands out as one of the hottest names that’s likely to go public in the near future. The company’s core business is payment processing services for online enterprises. That’s been a great category to be in as the coronavirus pandemic has prompted shoppers to do more spending online and accelerated an overall shift of commerce to digital channels.
In October, a private valuation pegged the company’s valuation at roughly $36 billion. A report from Bloomberg published late in November then said that Stripe was seeking to raise funds through selling stakes valuing the company between $70 and $100 billion. Considering how hot the market for IPOs has been and the extent to which shares for promising tech companies have been bid up in early auction trading, the stock could hit the market at levels valuing the company significantly above $100 billion.
Is this fast-rising fintech innovator on track to be 2021’s biggest IPO?
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2021’s billion-dollar IPO class at a glance
Here’s a look at 10 other high-profile IPOs that could hit the market in 2021:
CompanyIndustryMost recent valuationRobloxVideo games$29.5 billionAffirm HoldingsLoan platform$11 billionInstacartGrocery delivery$30 billionBumbleOnline dating Between $6 billion and $8 billionRobinhoodFinancial trading $11.7 billionNextdoorLocalized social networkBetween $4 billion and $5 billionGitlabOpen-source code managementMore than $6 billionCourseraEducation platform$5 billionCoinbaseCryptocurrency platform$8 billionUiPathRobotics software$10.2 billionPetcoPet retail$6 billion
Table by author; Data source: Bloomberg, CNBC.
It’s still not certain that Stripe will have its initial public offering this year, but this is undeniably a promising company that’s generating tons of excitement among investors. Based on the current outlook for the crop of companies likely to go public next year, there’s a good chance Stripe will be 2021’s biggest IPO. It might wind up as the biggest public debut since oil and energy giant Saudi Aramco hit the market with a valuation of roughly $1.88 trillion in December 2019.
Airbnb (NASDAQ:ABNB) was last year’s biggest IPO — with the company’s initial listing price valuing the company at roughly $47 billion. The travel rental platform was then bid up in early auction trading and eventually hit the market with a valuation of roughly $101.6 billion. As it stands right now, Stripe has a fair shot of opening for trading with a valuation above that level. However, there is at least one candidate that could snatch the title of 2021’s biggest IPO.
Ant Group, the Chinese company that owns Alipay and other widely used fintech services, was on track to go public in November 2020 with a market cap of roughly $313 billion. The company’s IPO process was derailed by ongoing investigations from the country’s regulatory bodies, but Ant could reemerge to have this year’s biggest public debut if it clears government approval.