8 Upcoming IPOs You Need to Consider for Your Portfolio

There's something very exciting about getting in on the ground floor of a business's entrance into the public markets that attracts investors to initial public offerings.

Although IPOs seem to have fallen out of favor these days to more exotic ways for stocks to begin trading -- such as direct listings and the current flavor of the month, special purpose acquisition companies (SPACs) -- there are a number of businesses looking to go public by whatever means that deserve your attention. Here are eight of them.

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Brand management company Authentic Brands Group is preparing for an IPO that could see it valued at $10 billion. With a portfolio that spans entertainment, media, fashion, beauty, home, and hospitality, it has become a powerhouse of brand promotion that retailers and shopping malls are turning to to help them navigate the retail apocalypse.

Authentic Brands operates the businesses of retailers including Aeropostale, Brooks Brothers, Forever 21, Lucky Brand, and Nautica, and it recently acquired Eddie Bauer.

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Online grocery retailer Boxed said in June it would go public via a merger with SPAC Seven Oaks Acquisition (NASDAQ: SVOK), which would value the stock at $887 million.

Boxed got a boost from the COVID-19 pandemic, which saw consumers turn to e-commerce providers as a means of avoiding going to the store in person. Revenue for the online bulk retailer jumped 81% to $55.5 billion last year.

Digital mortgage lender Better is another company avoiding the traditional IPO route and opting for a merger with a SPAC to hit the public markets. The lender said it would merge with Aurora Acquisition (NASDAQ: AURC) in a deal that values it at $7.7 billion.

Backed by SoftBank Group (OTC: SFTB.Y), Better will receive $1.5 billion in a private investment in public equity (PIPE) deal before the merger -- a big bet the mortgage lender can keep growing. Last year Better generated over $850 million in revenue and profits of more than $200 million.

Enterprise software company Databricks has been compared to Snowflake, the cloud services company that went public in 2020 and was the largest software IPO at the time.

Databricks is the creator of Apache Spark, the world's leading data analytics platform, which according to NVIDIA, is "used by more than 500,000 data scientists and 16,000 enterprises worldwide." With the enterprise software industry a large and growing market, Databricks has the potential to have a massively successful debut.

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The Uber of China, Didi Chuxing, looks to have its own blockbuster IPO, with an anticipated $60 billion valuation. Its most recent filing indicates an offering price of $13 to $14 per share, which would allow it to raise over $4 billion. Interestingly, Uber is one of its investors. One risk is that Chinese regulators are investigating whether the ridesharing service used its dominant position to squeeze out smaller rivals.

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We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

While food delivery giant Instacart could go public via an IPO, it's also believed a direct listing is distinctly possible. Where IPOs feature banks underwriting the stock offering, direct listings do an end run around the financial institutions by letting the company, its early backers, and shareholding employees sell their shares directly to the public.

Instacart bills itself as the world’s largest online grocery service, but its business has expanded far beyond just groceries to include delivering products from Best Buy, Costco Wholesale, and others.

Investors have been waiting for online brokerage Robinhood to go public for some time now. Having democratized investing by eliminating transaction fees -- a move that forced pretty much the entire industry to follow suit -- it helped foment the retail investor rebellion earlier this year as stock traders used the app to rally around heavily shorted stocks like GameStop and AMC Entertainment.

Although it faced a backlash when it subsequently limited trading on those stocks when the frenzy was at its peak, it doesn't seem to have had any lasting impact on its business that would impact its IPO.

ALSO READ: Is This New IPO a Better Food Stock Than Beyond Meat?

Chat and communications platform Discord had been deep into talks to be acquired by Microsoft when it walked away from the deal that was reportedly in the neighborhood of $10 billion. Two other companies were reported to have had interest in acquiring Discord as well, but it chose to stay independent and may consider a public listing. While it's the least likely one on this list to be publicly traded anytime soon, it's still a company to keep on your radar.

Originally built for gamers, Discord was able to benefit from the demand for voice chat that was spurred by sites like Clubhouse. It generated $130 million in revenue last year, nearly triple the $45 million seen the year before, as people being stuck at home because of the pandemic caused a surge of interest in such technologies. Discord, though, is not yet profitable.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Investing in IPOs is a hit-or-miss proposition. In the past year there have been over 380 IPOs launched, and though some 56% are not losing money for investors, only a relative handful have been really noteworthy in generating substantial returns.

Just 46 stocks have doubled in value. Now that's a remarkable result, and investors should not go into any stock purchase with a goal to double their money in a year or less. As with any investment, it's the long-term prospect for the business's growth that needs to be examined.

But these eight stocks, if and when they do go public, are businesses that look like they have a very bright future ahead of them.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale, Microsoft, NVIDIA, and Snowflake Inc. The Motley Fool recommends Softbank Group and Uber Technologies. The Motley Fool has a disclosure policy.