The initial public offering (IPO) calendar was sparse in 2022 and 2023. The bear market made many private companies rethink their plans to go public. With investor sentiment waxing negative for much of the last two years, IPOs garnered only muted interest, reducing the amount of cash private companies might raise from selling shares to the public.

IPO

IPO (Initial Public Offering) is the first sale of stock by a private company to the public, making it a publicly traded entity.

The result was a terrible year for the market for IPOs. According to financial research company S&P Global (SPGI 1.06%), there were only 1,429 IPOs worldwide in 2023, half as many as in 2021. A little over $123 billion was raised, down from $627 billion in 2021.

Arrow rising over blocks spelling out the letters IPO sitting atop stacks of coins.
Image source: Getty Images.

Nevertheless, the IPO market could be heating up again after many private companies delayed their IPO plans while waiting for a bear market to ease.

The 2023 IPO calendar

Notable IPOs in 2023

Here are the top IPOs from 2023.

Data source: Company Securities and Exchange Commission (SEC) filings.
Company What They Do IPO Date
CAVA Group Top Mediterranean-themed fast-casual restaurant chain June 15, 2023
Vinfast A Vietnam-based electric vehicle start-up planning a U.S.-based factory Aug. 15, 2023
ARM Holding Top semiconductor design licensing company, currently a subsidiary of Japan's Softbank to be spun off as an independent entity Sept. 14, 2023
Instacart A grocery ordering and delivery service that partners with physical stores Sept. 18, 2023
Birkenstock An old casual sandal company enjoying resurgent popularity Oct. 10, 2023

SEC (Securities and Exchange Commission)

The SEC, or Securities and Exchange Commission, is an independent government agency responsible for ensuring the integrity of the capital markets in the United States.

1. CAVA Group

CAVA (CAVA -0.1%) is a fast-expanding, fast-casual restaurant (the same type of dining experience as Chipotle (CMG 0.53%)). The restaurant has a Mediterranean flair, marketing the healthy lifestyle and simple fresh-ingredient cuisine of southern Europe, northern Africa, and the Middle East.

Over the summer of 2018, CAVA acquired another fast-casual chain with a Mediterranean fare chain, Zoe's Kitchen, which itself was a publicly traded stock at the time.

CAVA went public in June 2023 and almost doubled from the IPO price when shares began trading publicly on stock exchanges. CAVA is growing fast and has started reporting a profit, too, though slim profit margins make it a high-risk bet right now.

2. Vinfast

Vinfast is the latest start-up company to cash in on the electric vehicle (EV) trend. A part of Vingroup, Vietnam's largest business conglomerate, Vinfast is a subsidiary headquartered in Singapore.

Vinfast opted to go public via a merger with special purpose acquisition company (SPAC) Black Spade Acquisition in August 2023, issuing just 1% of its total shares (the majority remaining with its founder). The stock more than tripled when shares began publicly trading, but not even the small number of shares in circulation has been able to keep the stock price high. Shares are down significantly since the IPO.

Vinfast will use cash from its IPO to build a new factory in the U.S. The company is offering two all-electric SUVs, currently available for reservation in the U.S. Production from a U.S. facility isn't expected to begin until at least 2025. Meanwhile, deliveries within Vietnam have begun in earnest. Early on, it appears there are serious concerns about vehicle quality, and recalls have been issued.

Semiconductor chip being manufactured in factory.
Image source: Getty Images.

3. ARM Holding

Following Intel's (INTC 0.61%) successful spinoff of its self-driving car subsidiary, Mobileye (MBLY -0.36%), in 2022, ARM Holding was the next semiconductor company to hit the public markets. The current owner, SoftBank (SFTB.Y 3.09%), a large investment holding company in Japan, purchased ARM in 2016 and is selling some of its shares to raise cash.

ARM is a top licensor of semiconductor chip designs -- counting megatech businesses like Apple (AAPL 0.51%) as customers. Apple uses ARM to design silicon for its iPhone and uses its M-series chips for its MacBooks.

ARM was key to making mobile computing mainstream, but its energy-efficient chip designs are also beginning to gain market share in the data center space. That could mean big opportunities for would-be shareholders of ARM in the next decade as the era of artificial intelligence (AI) dawns on the global economy.

SoftBank was eyeing an initial valuation of at least $50 billion on ARM, but the stock surged in the days immediately following public trading. This puts an extremely high premium valuation on this semiconductor technologist.

4. Instacart

Instacart (CART 2.44%) quickly became a top e-commerce name early in the pandemic. The company partners with grocery stores, big-box retailers, pharmacies, and other brick-and-mortar stores to provide consumers with an online shopping experience and same-day home delivery service.

The company's growth skyrocketed in recent years, but market turmoil and high inflation led to slashed valuations for Instacart. A recent estimate pegged the company's value at about $13 billion in May 2023 -- down almost 70% from its peak valuation in early 2022. As a result, Instacart slashed expenses in preparation for an IPO.

The long-awaited public offering finally happened on Sept. 18, 2023, and the final IPO valued the e-commerce and delivery company at about $10 billion and raised about $660 million for Instacart's coffers. However, the share price has deteriorated since then, and Instacart is now valued at a market cap of under $7 billion at the beginning of 2024.

5. Birkenstock

Birkenstock (BIRK 2.88%) is a casual sandal company with roots that go back to the 1800s, but it rose to fame in the 1960s. The German footwear company has been enjoying resurgent success, though.

A couple of years ago, the Birkenstock family sold a stake in the business to a private equity fund affiliated with luxury goods giant LVMH Moët Hennessy Louis Vuitton (LVMUY 0.42%). Birkenstock sandals also made an appearance in the Barbie movie over the summer, which has also reportedly provided a boost in sales.

Birkenstock's IPO was in October 2023. The sandals brand was valued at over $8.6 billion and raised nearly $500 million in cash for the company.

The 2024 IPO calendar

Upcoming IPOs in 2024

Here are a few IPOs to look forward to in 2024.

Data source: Company Securities and Exchange Commission (SEC) filings.
Company What They Do Projected IPO Date
Discord Communications app popular among video gamers but with growing adoption as a chat app among other users as well Possibly in 2024
Reddit Popular social media site and public forum for making posts where content is promoted via user voting March 2024
Databricks Cloud-based tool for collaborating on data management and analysis; also used in building AI applications To be determined
Stripe Digital payments infrastructure and software leader that powers payment capabilities for merchants worldwide To be determined
Turo A car-sharing service that often draws comparisons to Airbnb's model for owner listings of places to stay To be determined

1. Discord

Chat and mobile communications start-up Discord gained millions of new users during the pandemic. Discord is a favorite among video game enthusiasts but has also gained adoption for other uses. The company provides chat, voice, and video via private topic-based channels. It generates revenue via premium subscriptions, unlike other communications apps that make money from advertising.

Revenue

Revenue is a business’s gross income or the amount of money it brings in from regular operations before costs are considered.

Discord filed with the SEC in 2021, but the bear market slowed its plans for an IPO. Recent moves from the company suggest a 2024 IPO is possible. It has reportedly turned down several buyout offers, including from Microsoft (MSFT 0.46%) and Amazon (AMZN 1.49%).

The company has also hired executives who have taken other tech companies public in recent years. Discord's last private funding round in late 2021 valued it at more than $15 billion, although that figure has almost certainly fallen as the bear market has humbled tech company valuations.

2. Reddit

In late 2021, social media and public forum Reddit filed for an IPO with the SEC. It was reportedly tapping Wall Street banker Goldman Sachs (GS 3.3%) in its efforts to go public and was seeking a total valuation of $15 billion.

However, the market sell-off in 2022 and 2023 slowed its IPO plans and likely lowered Reddit's valuation. After years of waiting, though, it seems a go-public date is now set for March 2024, with a valuation of possibly $5 billion.

Reddit hosts tens of thousands of active subreddits, and users create and vote on content. The company makes money through advertising and an ad-free premium subscription. Reddit picked up millions of new users in 2020 and 2021.

However, as it prepares for an IPO, the company is trying to show it can be profitable. It laid off some of its staff and, in a particularly controversial move, said it would begin charging high fees for its application programming interface, or API -- a bit of code developers use to embed Reddit or Reddit data into their apps. Many developers have protested that the high fees would kill their work.

3. Databricks

Databricks might have missed the tech IPO boom of 2020 and 2021, but an IPO is still reportedly in the works. The company provides a cloud-based platform for data scientists and analysts to collaborate on digital information warehousing and work on AI applications.

Over the summer of 2021, Databricks was valued at some $38 billion and had another equity raise in 2023 that valued it at $43 billion. The company said it now brings in over $1.5 billion in annual recurring revenue from subscribers as of 2023. An IPO date hasn't been set yet. Given the hot year that AI tech stocks had in 2023, plans to go public in 2024 could be in the works.

4. Stripe

Stripe is a leader in payment processing services. The company says millions of businesses worldwide use its platform for processing digital payments.

Stripe integrates with e-commerce payment systems, such as Shopify (SHOP 1.26%); helps with payment acceptance from card networks, such as Visa (V 0.95%); and integrates with various cryptocurrency marketplaces. It also provides tools to help merchants and businesses detect and prevent financial fraud, has software for financial and tax reporting, and helps banks offer digital products to customers.

Stripe registered its intent to have an IPO with the SEC in 2021. However, details for the IPO and a date have yet to be set, and the company is reportedly still determining whether a 2024 public offering is prudent. The bear market and elevated competition in the digital payments industry have certainly affected Stripe's plans.

Due to its large size, some investors speculate that a Stripe IPO might occur as a direct listing (where no new money is raised for the company) rather than a traditional IPO. And hit by macroeconomic issues, the company raised $6.5 billion from investors in a private funding round in 2023. Estimates point to Stripe's market cap falling from a peak of $95 billion to $50 billion.

A rental car agreement with red model car on top.
Image source: Getty Images.

5. Turo

Turo is a car-sharing service that allows vehicle owners to list their cars for hire and connect with travelers in need of a rental. Turo is sometimes hailed as the auto rental version of Airbnb's (ABNB 1.03%) marketplace for places to stay.

Turo was founded in 2009 and has reportedly raised $500 million in private funding along the way. Included in the list of major shareholders is internet conglomerate IAC (IAC 1.0%).

The car-sharing service hasn't set an IPO date yet. However, rumors are the IPO process has been started, and a 2024 market debut may happen.

Investing in IPO stocks

Investing in IPO stocks

Investing in IPOs can be risky. This isn't simply because many IPOs can be richly valued tech stocks.

Take Porsche -- part of German automaker conglomerate Volkswagen (VWAGY -0.47%) -- for example. At the end of September 2022, Volkswagen spun off 25% of its equity stake in Porsche and raised 9 billion euros (about $8.8 billion). Volkswagen returned 49% of proceeds to shareholders via a special dividend in early 2023.

As for Porsche, the company reported 17.9 billion euros (about $17.5 billion) in sales during the first half of 2022 and generated an operating profit margin of 19.4%. But despite solid performance and optimism that Porsche's luxury sports cars and EVs would provide years of steady growth, shares fell below the IPO price in the days following the IPO. (Note to retail investors: Beware before swooping in to buy a hyped IPO stock.)

Related investing topics

The 2024 IPO calendar could feature some hot companies looking to go public, some with exciting potential. However, be careful before jumping in. IPO stocks can be risky, especially during the first year or two after the company goes public.

Companies that have an IPO to raise cash may need that money to attempt to stabilize their business or to fund aggressive expansion plans. Employees and early investors often sell in the first year or two after a hot IPO, which can also lower stock prices if too many big shareholders sell within a short period of time. It often pays to wait before buying a fresh IPO.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Nick Rossolillo has positions in Airbnb, Amazon, Apple, Shopify, and Visa. The Motley Fool has positions in and recommends Airbnb, Amazon, Apple, Chipotle Mexican Grill, Goldman Sachs Group, Microsoft, S&P Global, Shopify, Visa, and Volkswagen Ag. The Motley Fool recommends Cava Group, Intel, and Mobileye Global and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.