The U.S. market for initial public offerings (IPOs) had a banner year in 2020 despite the pandemic — or perhaps because of it. Connected-commerce companies often led the way, frequently enjoying strong IPO pricing and even bigger first-day “pops” as investors realized that the digital shift created by the COVID-19 outbreak would likely never fully reverse.
Here are a few of the more noteworthy ones, listed in order of valuation at the time of going public:
1. Airbnb ($47 billion)
A global pandemic that all but shut down the worldwide travel business for months wasn’t enough to stop this IPO from getting off the ground.
Airbnb did reportedly move its widely anticipated IPO from the spring to late fall, but went public in December at $68 a share — way above both its original pricing range of $44 to $50 and an upwardly revised $56 to $60. The stock then soared 112.8 percent to end its first trading day to close at $144.71. Airbnb has only risen from there, closing Wednesday (Dec. 23) at $158.01, up another 9.2 percent since its first-day close.
That’s impressive given that the pandemic almost drove Airbnb out of business this spring. With revenues collapsing, the company borrowed $2 billion and laid off 1,900 employees just to stay alive. But the company quickly pivoted away from its historical focus of renting units in big cities around the world to business and leisure travelers, as they suddenly weren’t traveling. Instead, Airbnb found success renting units — often whole houses — to urban dwellers looking to escape cities amid the COVID-19 crisis by renting in suburban and rural areas within 300-mile drives of their homes.
2. DoorDash ($39 billion)
COVID-19 was actually great news for DoorDash, as government shutdowns and consumer virus fears forced restaurants almost everywhere to eliminate dining in and switch to pickup and delivery. While many eateries have complained about the hefty fees that DoorDash and other delivery services charge, business is nonetheless booming.
DoorDash disclosed in an S-1 filing ahead of its recent initial public offering that revenues soared 226 percent year over year to $1.92 billion during 2020’s first nine months. The company also reported a $23 million profit for the second quarter — its first black ink in history.
Investors were impressed, with the IPO pricing at $102 a share — well above the $90-to-$95 expected range. And DoorDash only rallied from there, soaring 85.8 percent on its first trading day Dec. 9 to close at $189.51. Shares have since pulled back some, but closed Wednesday at $158.22.
3. Wish ($17 billion)
Wish parent ContextLogic went public in December shortly after Airbnb and DoorDash enjoyed big first-day pops, and it initially seemed likely to follow suit.
Considered an online version of a dollar store, ContextLogic looked in many ways like the next Amazon. Markets initially responded accordingly, with shares pricing at $24 — the very top of the stock’s $22 to $24 expected range. But far from soaring on its first day, ContextLogic’s stock actually sank 16.4 percent to close at $22.05. The stock has rebounded some, but closed Wednesday at $20.94, down 12.8 percent from the IPO price.
Investors appear to see several problems with the stock, from a lower-income target demographic to some weakness in the financials. For instance, the company’s S-1 filing showed that net losses attributable to common shareholders rose to $176 million through 2020’s first nine months – way up from just $12 million during the same period last year.
The company also reported that revenues grew 31.8 percent during 2020’s first nine months to $1.75 billion — not bad, but far below what other major online retailers are seeing. For instance, Target reported a 155 percent jump in digital sales during the third quarter.
4. GoodRx ($12.7 billion)
GoodRx, the popular app that helps consumers find discounts on prescription drugs, is a rarity among tech IPOs in that the company’s S-1 filing actually showed a long history of profitability.
Co-founded in 2011 by Facebook veteran Doug Hirsch (now GoodRx’s CEO), the company has operated in the black since 2016. GoodRx earned $55 million in 2020’s first half prior to the company’s September IPO. That helped push the IPO price up to $33 a share, well above the expected $24-to-$28 range. GoodRx then popped 53 percent on its first trading day to close at $50.50 a share. It got as high as $64.22 intraday a few sessions later.
However, GoodRx reported a $50 million Q3 loss in November, helping to send the stock partly back downward. Shares fell to as low as $33.51 intraday a few days after the earnings release, but have partially rallied back and finished Wednesday at $47.59.
5. Amwell Health ($4 billion)
The COVID-19 pandemic was actually great news for Amwell Health, a telemedicine platform for doctors to meet with patients virtually.
With physicians initially replacing most in-person visits with virtual ones, Amwell wrote in its S-1 filing that appointments over the platform tripled to 2.2 million in Q2 vs. 700,000 in Q1. Visits soared to as high as 40,000 a day in April — up 1,279 percent from the roughly 2,900 a day that the company saw in April 2019.
That helped Amwell — whose pre-IPO investors included Google — sell 41.2 million shares at $18 apiece, up from its original plan to offer 35 million shares in a $14-to-$16 range. The stock then soared another 28 percent when it started trading on Sept. 17, ending the day at $23.07.
The company’s first post-IPO earnings report last month showed that revenues shot up 80 percent to $62.6 million in Q3 from $34.7 million a year earlier, although losses also soared to $64.6 million from $24.1 million a year earlier. Still, patient visits soared by 450 percent year over year during the quarter, while the number of active medical providers on the platform rose 933 percent year on year to about 62,000. That’s been enough to push Amwell’s stock up to $29.95 a share as of Wednesday’s close, up 66.4 percent from its IPO price.
John Jesser, Amwell’s president of clinical solutions, told Karen Webster earlier this year in an “On The Agenda” discussion that telehealth “is really a great source for direct medical guidance, treatment, prescriptions ordering.”
“Even though there is no prescription for this necessarily, a doctor monitors who needs to stay home and drink fluids — and which patients look like they need to be in the ER so they can help make that happen,” he said. “And now you’re not having 500 people walk into the same ER at once saying, ‘I have a fever.’”
6. Vroom ($2.5 billion)
Car-buying platform Vroom staged a successful IPO in June, selling 21.25 million shares at $22 each vs. initial plans to offer 18.75 million shares in an $18-to-$20 range.
The stock then soared 117.7 percent on its first trading day to close at $47.90, although it’s since pulled back some to $43.56 as of Wednesday’s close.
Vroom CEO Paul Hennessy told Karen Webster prior to the IPO filing that the pandemic actually helped his company more than the outbreak hurt it.
“The model is able to effectively deliver to every state in the country, and we’ve seen demand remain very strong because digital does exactly what consumers need it to at this time: deliver to their driveway … and settle the entire transaction end-to-end in a contact-free way,” Hennessy said.
Vroom’s growing eCommerce revenues apparently impressed investors enough to overlook the firm’s big net losses. In its first post-IPO earnings report, the company said eCommerce revenues rose 24.5 percent year over year during the third quarter to $221.8 million. However, total company revenue fell 5.1 percent year on year to $323 million.
On the plus side, Vroom’s Q3 net loss narrowed by 4.8 percent year over year to $37.9 million from $39.8 million in the same 2019 period.
7. Shift4 Payments ($1.8 billion)
Shift4 Payments, which provides secure payments-processing solutions used by more than 200,000 businesses, saw its stock pop 45.8 percent on the company’s first trading day in June — and shares have kept going up from there.
The company priced its offering at $23 a share — well above the IPO’s original $19-to-$21 range — but the stock rallied to a $33.54 close on its first trading day. Since then, rapidly growing revenues and sharply narrower losses have helped Shift4 Payments stock more than double, with shares closing at $71.86 on Wednesday.
Shift4 Payments recently reported that gross revenues rose 11 percent year over year to $214.8 million in the third quarter, while net losses dropped 56.2 percent to $9.9 million from $22.6 million in Q3 2019.
8. Lemonade ($1.6 billion)
InsurTec Lemonade has seen its stock go through the roof since going public in July, rising 139 percent on its first trading day after pricing at $29 a share. The $29 IPO price had already marked a big jump from the $23-to-$26 range that Lemonade initially sought — but Lemonade has kept going since then. All told, it’s risen 363.6 percent from the IPO price to reach $134.45 as of Wednesday’s close.
Lemonade focuses on selling renters’ and homeowners’ insurance via an app that’s geared toward millennial and Gen Z consumers. Chief Financial Officer Tim Bixby told Karen Webster shortly after the IPO that the insurance sector is ripe for disruption from newcomers who lack established firms’ “legacy baggage.”
“You’ve got an industry that’s one of the biggest sectors on the planet in terms of dollar flow, but you’ve got players who face the pretty classic innovator’s dilemma,” he said. “They’re led by smart people who want to embrace new technologies, but they’re really hamstrung by legacy systems.”
9. BigCommerce ($1.6 billion)
Software-as-a-Service eCommerce platform BigCommerce had the biggest first-day pop of any major connected-economy company in 2020, soaring more than 200 percent following its August IPO.
The stock originally priced at $24 a share — well above both the $18-to-$20 range BigCommerce had originally expected and the $21-to-$23 range it later announced. BigCommerce also increased the offering’s size to 9 million from the 6.85 million originally planned.
However, the stock nonetheless shot up as to high as $93.99 on its first trading day before closing at 72.27, up 201.1 percent. BigCommerce has gone as high as $109.15 intraday since then, but since pulled back some and closed Wednesday at $72.54.
The company helps businesses design and roll out online storefronts. Jim Herbert, BigCommerce’s general manager for EMEA, recently told PYMNTS that the firm is assists merchants in becoming agile at digital pivots during the pandemic.
“I think it’s all come back to the fact that the businesses that are thriving in this sort of situation are ones that can move quickly,” Herbert told PYMNTS. “They need to have the agility to kind of cope with the sort of changing conditions, and that’s what we’re seeing in the retail world. It’s also what we’re seeing in life in general, right?”
10. Paya ($1.3 billion)
Paya, which provides integrated payment and commerce solutions, went public in October by merging with a special purposes acquisition company (SPAC) company called Fintech Acquisition Corp. III at a $1.3 billion valuation.
The stock rose modestly by 2020 IPO standards since then. After opening for trading at $11.50 a share on Oct. 19, Paya closed at $12.15 on its first day. It’s since risen to $14 as Wednesday’s close, up some 22 percent since trading began.
Paya processes more than $30 billion a year in payments across credit and debit cards, ACH and checks.
CEO Jeff Hack told Karen Webster shortly after the company went public that Paya chose to list its shares in part because “there is a level of transparency that comes with being a public company, which I think for many software companies can be valuable.”
“There’s always a little bit of uncertainty with privately held businesses about their path and what will go on,” he said. “This allows us to now, publicly, showcase the progress we’ve made as a company.”
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