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What are the best upcoming IPOs to watch?

Many upcoming IPOs have been put on hold due to Covid-19. Here, we take a look at the UK, US and international IPO contenders to watch as the global economy recovers.

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Darktrace (estimated market cap: £3.8 billion)

Cyber security company Darktrace plans to list on the London Stock Exchange (LSE) in 2021, targeting a valuation of £3.8 billion. The business supplies software to corporates that helps to detect cyber threats on their networks – and it has been particularly successful during the Covid-19 lockdown period, as millions of people switched to remote working. The higher demand for the product has certainly increased the appetite for Darktrace stock.

The company launched in 2013, has 44 offices worldwide and employs more than 1200 people.

EG Group (estimated market cap: £10 billion)

A blockbuster IPO is on the cards for British retailer EG Group, said to be valued at around £10 billion. Many investors are keeping a close eye on the upcoming listing after EG Group announced that it will be taking over supermarket chain Asda, which had IPO plans of its own. However, many are wary of the group since its sales slumped due to lower fuel demand in 2020.

Revenue for the nine months ending September 2020 was down by 23% from the same period in 2019. EBITDA increased by 17% over this time, which may offer some consolation for the group.

Trustpilot (estimated market cap: £774 million)

Another IPO that could be taking off in 2021 is that of reviews website Trustpilot. The company is eyeing a valuation of more than £770 million, assuming it can keep up its positive sales figure of at least £76 million. Most of Trustpilot’s revenue comes from clients subscribing to their online services.

Trustpilot is a leader in the online review space, and it is working on intensifying its credibility with the launch of a website that will clamp down fake reviews on the web. More than 94 million reviews are displayed on Trustpilot’s website, and the site receives four billion views a month.

Deliveroo (estimated market cap: £3.2 billion)

Deliveroo is a food-delivery business headquartered in the UK, with operations across the world. It hinted at a 2020 IPO after short-lived talks about a merger with Uber collapsed, but since time is running out, the listing is more likely to happen in 2021.

Deliveroo’s last funding round valued the firm at £1.6 billion (in 2018). A £459 million investment from Amazon in 2019/2020 may have given the business the momentum it needs to reach its valuation target of £3.2 billion. Many reports state that Deliveroo’s focus is on growing the business and reaching new customers, not an IPO specifically. However, Covid-19 may have potentially given it that boost as more people enjoyed stay-at-home meals.

Hungry for a Deliveroo IPO? Learn how you could trade the stock

McLaren Group (estimated market cap: £2.4 billion)

McLaren Group, the British Formula One firm and sports car maker, has been linked to an IPO since 2011.

Following Aston Martin’s listing in 2018, the head of McLaren’s automotive division confirmed that it was not going to follow suit just yet.

Further comment by McLaren Group’s CEO in 2019 was that an IPO might not happen before 2021. That was because the environment for car makers was very volatile with Brexit impacting supply chains and the trade war raising the cost of doing business. Now, the havoc that Covid-19 wreaked on the markets may delay the plans even further.

Learn more about the McLaren IPO

Jaguar Land Rover (estimated market cap: £2 billion)

Jaguar Land Rover (JLR) is part of India’s Tata Motors and long been rumoured to be considering an IPO.

Optimism surrounding the car company’s listing has dwindled as a result of delays to Brexit, declining diesel sales, a drop in Chinese demand and – more recently – the coronavirus crisis.

In 2019, Tata Motors shares experienced their biggest fall on the Bombay Stock Exchange in 26 years after announcing a £3.1 billion write-down of its investment in JLR.

Learn how to trade JLR before the IPO

Vue International (estimated market cap: £1.6 billion)

Vue International is the biggest cinema chain operating from the United Kingdom. It has 286 cinemas across countries including the UK, Italy, Poland, Germany, Ireland and Latvia. It managed to delay its rumoured 2018 IPO after finding a way of cashing in on its investments while keeping the company private.

Further, it has expanded internationally without needing money from public markets, but its investments and growth could demand more funds – particularly in light of the Covid-19 pandemic, which forced the chain to temporarily close many of its cinemas . According to Vue, the group will target a listing of around £1.6 billion in the future.

Find out how you can profit from the much-anticipated Vue listing with IG

BrewDog (estimated market cap: £1.5 billion)

BrewDog, a famous craft beer brewer, announced in 2018 that it is considering an IPO by 2020, but it was awaiting the right market conditions. Considering the recent coronavirus crisis, the chances of the listing may be dwindling.

The IPO would give current stockholders an opportunity to cash in on their investment and provide some longer-term liquidity for the business. BrewDog is said to be eyeing a London listing, but a US listing has not been ruled out completely. The last estimated valuation (in 2017) was £1 billion.

Want to get exposure to BrewDog? Learn more about the IPO

Proof of Trust (estimated market cap: over £1 billion)

Proof of Trust is a blockchain firm that resolves disputes on blockchain networks. The company owns a worldwide patent that it says will help it to this end, offering clear dispute resolution with smart contracts.

Proof of Trust has stated that it wants to list on the LSE to raise the company’s profile and stimulate funding to compete on a global scale – something which it says tech companies rely on heavily. The company released a statement about its intention to list on 30 June 2020, with updates to follow later in the year.

Check out this step-by-step guide to trading IPOs

Best upcoming US IPOs to watch

  1. TikTok Global
  2. Airbnb
  3. Starlink
  4. Instacart
  5. Robinhood
  6. Eaze
  7. DoorDash1

TikTok Global (estimated market cap: $50 billion)

A TikTok IPO in 2021 is an exciting prospect for many, as the mega-successful app received a $50 billion valuation in July 2020. The exact date of the IPO is still unknown, but what we do know is that

the company will be listed as TikTok Global. Ahead of the listing, 80% will be owned by ByteDance and 20% by Oracle and Walmart.

TikTok is already bigger that social competitor Snap Inc, even though it launched years after. So, if the TikTok Global IPO goes ahead without a hitch, investor interest is likely to be very strong.

Read all about the anticipated TikTok Global IPO

Airbnb (estimated market cap: $35 billion)

Airbnb is an online booking space for accommodation, primarily based on the principle of home sharing. In 2019, it confirmed that it was ready to go ahead with a 2020 IPO, but then the travel industry took a major knock due to the global coronavirus shutdown.

Airbnb was most recently valued at around $18 billion, so it is likely to target a valuation above this figure when it lists. However, this figure may not reflect the true value of Airbnb stock to the customer, as there has been a lot of media hype surrounding the IPO.

Learn more about the Airbnb IPO

Starlink (estimated market cap: $30 billion)

Rumours surrounding a Starlink IPO surfaced in 2019 after SpaceX – its parent company – hinted at plans for a listing in the future. However, Elon Musk denied the rumours in March 2020, saying that SpaceX was focusing on chasing other goals, such as establishing a settlement on Mars. Starlink is a satellite network aimed at providing global internet access at very high speeds.

If there is ever an IPO, the valuation will depend on market conditions at the time of the listing and the performance of SpaceX.

Discover more about Starlink’s upcoming IPO

Instacart (estimated market cap: $14 billion)

Instacart is a grocery-delivery service, founded in 2012, which was valued at around $13.7 billion after its latest round of fundraising in June 2020. One of its biggest partners, Whole Foods, was acquired by Amazon a few years ago, which made some people wary of the business’s future.

However, Instacart has grown to service 15,000 stores across 400 locations in the US and Canada. Though it does not disclose its revenue or profit, the size of its presence across North America does attest to its ongoing success.

Discover how to trade Instacart shares

Robinhood (estimated market cap: $11.2 billion)

Robinhood has been open about its plans to launch an IPO. The company originally started as a stock trading app but it has since expanded into other services, with cryptocurrencies proving particularly popular.

Any IPO will be part of a wider plan to become a full-service finance company over the next couple of years. Securing the support of investors, particularly as scepticism over cryptocurrency trading remains high, could be the biggest barrier to getting the company ready for a public listing.

In the most-recent round of fundraising (series G) – which the company reported in August 2020 – Robinhood secured $200 million from D1 Capital Partners. This comes on the back of another round of fundraising in July 2020 which brought in $320 million.

Learn more about the Robinhood IPO

Eaze (estimated market cap: $500 million)

Speculation surrounding an Eaze IPO has been rife since 2018, but now the marijuana delivery service might not list its stocks before the end of 2020. Of course, the possibility has sparked a lot of interest among traders and investors – especially following the major expansion of the cannabis industry over the past three years.

Eaze predicted it would achieve $1 billion in revenue by 2020, but it’s struggling to reach $500 million in transactional value. This could have an impact on the date as well as the final valuation of the IPO. Over the longer term, Eaze’s success will depend on its ability to keep up with the fast-changing cannabis and tech landscape.

Learn how you could trade the Eaze IPO

DoorDash (estimated market cap: $16 billion)

DoorDash, a food delivery business, is reportedly eyeing an IPO in November or December 2020. The date is subject to change amid the coronavirus pandemic, and in fact the IPO has already been delayed from its initially anticipated timeframe of early 2020.

The company saw increased demand during the pandemic, as restaurants were forced to close and consumers were less inclined to eat out – opting instead for home-delivery food services. Investors placed a $16 billion valuation on DoorDash following an announcement on 18 June 2020 that it had secured over $400 million in series H fundraising.

Want to trade this IPO? Learn how

Best upcoming international IPOs to watch

  1. Vantage Towers (Vodafone)
  2. ByteDance
  3. Lamborghini
  4. Barbeque Nation Hospitality1

Vantage Towers (estimated market cap: between €10 billion and €20 billion)

Vodafone is planning to transfer the bulk of its mobile towers a new business – Vantage Towers – in 2021. This is part of its plan to monetise the 68,000 towers it owns at the beginning of the 5G cycle.

Vodafone could make billions from the listing, which it needs to pay off debt. While the company has not released much information about the IPO, it has stated that it does not expect the Vantage Towers market cap to exceed €10 billion when it lists.

Discover how to take your position on Vantage Towers’s IPO

ByteDance (TikTok) (estimated market cap: $75 billion to $100 billion)

Chinese start-up ByteDance became a household name after launching its famous TikTok app in 2017. The public is eagerly awaiting a 2020 IPO, which is said to be valued at around $75 billion. The company started posting a profit in June 2019 and reported revenue of more than $20 billion in 2019. It relies heavily on advertising for income, but it is always looking to develop new products that could fortify its revenue stream.

But, in July 2020 it was revealed that the company may abandon an international listing, opting instead to list its Chinese business on an exchange in Hong Kong or Shanghai. It’s currently unclear how this would affect the company’s value ahead of a listing.

Learn how to trade the ByteDance IPO

Lamborghini (estimated market cap: $11 billion)

Lamborghini has done well despite Covid disruptions, and is rumoured to be planning an IPO in the near future. The carmaker is owned by the Volkswagen Group and, if there is an IPO, the group would retain a majority stake. The finer details of the listing remain unknown for now.

Find out how to trade the Lamborghini IPO

Barbeque Nation Hospitality (estimated market cap: ₹10 billion to ₹12 billion)

Barbeque Nation Hospitality, launched in 2005, owns one of India’s biggest restaurant chains. Besides being a big name in the country, it also has a presence in the UAE, Oman and Malaysia.

An IPO of approximately ₹10 billion to ₹12 billion (roughly £105 million to £125 million) is expected in 2020, with the funds raised said to be used to build new restaurants, repay debts and fund general operations. The share price has been rumoured to float at ₹5.

Want to trade this IPO? Learn how

Biggest recent IPOs

Some of the biggest IPOs1 of 2020 include:

  1. Hut Group
  2. Palantir
  3. Snowflake
  4. Asana
  5. JDE Peet's

Hut Group (market cap: £5.4 billion )

Hut Group is a retail and technology group, that announced in August 2020 that it planned to list on the LSE, and it went public not long after – on 21 September 2020. The company was aiming for a £4.5 billion market cap at launch, but it soared past the estimate and reached a closing valuation of almost a billion pounds more (£5.4 billion).

There is a strong appetite for tech stocks in the UK, which could mean good news for The Hut Group in the future. However, investor confidence may take a knock due to concerns about the company being ineligible to list on the FTSE 100.

Trade Hut Group

Palantir (market cap: $16 billion )

Data-mining company Palantir, co-founded by Peter Thiel, listed on the NYSE on 30 September 2020, despite Covid-19 disruptions. Palantir has earned a reputation for being highly secretive but it is known to be one of the biggest players in big data.

The shares floated at $10, which was more than the reference price of the NYSE, set at $7.25 a share. This set the company’s market cap at the $16 billion mark, which was less than the estimated market cap of $20 billion.

Trade Palantir

Snowflake (market cap: $33 billion)

Snowflake, a cloud computing and data warehousing company, listed on the NYSE in September 2020. It was one of the most hotly anticipated listings of the year, attracting big names such as Warren Buffett’s Berkshire Hathaway (BRKb) and Marc Benioff’s Salesforce (CRM).

The day before the IPO, Snowflake had sold 28 million shares for $120 each. This was above the target IPO price of $100 to $110 per share. The company had been performing strongly in the 12 to 18 months leading up to the listing.

Trade Snowflake

Asana (market cap: $4 billion)

Project management software company Asana opted for a direct listing on the NYSE in September 2020 – on the same day as Palantir. It reached a valuation of $4 billion, after shares floated at $27. Asana is one of the many companies that benefitted from the Covid-19 lockdown period that forced people to work from home.

Trade Asana

JDE Peet's (market cap: €15.6 billion)

JDE Peet’s listed on Amsterdam’s Euronext NV exchange on 29 May 2020 – five days earlier than planned, following particularly strong interest from investors. The company is the result of a merger between coffee giants Jacobs Douwe Egberts and Peet’s Coffee. It is now the second largest company of its kind by volume, after Nestlé, and operates in more than 140 countries. It is expected that newly-formed JDE Peet’s will generate about €7 billion in revenue.

Learn how to trade JDE Peet's following its IPO

How to trade an IPO

There are two ways to trade and IPO – before the listing, and after the listing.

Before the IPO

If there is a lot of interest in a particular IPO, IG may offer a ‘grey market’ before such IPO is held. This means you can speculate on a company’s share price before it lists. The grey market price will be based on our prediction of the company’s market capitalisation at the end of the first trading day.

With a grey market, you would:

  • ‘Buy’ if you think the market cap will be higher than the grey market price
  • ‘Sell’ if you think the market cap will be lower than the grey market price

After the IPO

Once the company has listed, there are many ways you can attempt to profit from the IPO. As with all stock markets, you will be able to:

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Last updated: 26 November 2020

FAQs

With IG, you can trade upcoming IPOs before the listing – if a grey market is available. A grey market enables you to speculate on the company’s share price before the IPO.

If we offer a grey market, the price will be based on our prediction of the company’s market cap at the end of its first trading day. You’d ‘buy’ if you think the market cap will be higher than the grey market price at the end of the first trading day, or ‘sell’ if you think it will be lower.

You can buy and sell IPO shares as soon as the company lists on the stock market. You can either speculate on share price movements by CFD trading and spread betting, or you can buy shares outright by share dealing.

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1 Final IPO valuations are established on the first trading day.