Philos Partners Top 5 IPO Picks in 2023

Philos Partners

A brief summary of what Philos Partners believe to be the 5 IPOs most likely to succeed in 2023

DUBLIN, IRELAND, January 12, 2023 / — What will the initial public offering (IPO) market look like in 2023? After last year’s poor stock performance and a nearly closed IPO market, it’s difficult to believe that this year will be any better. However, if the macro winds do not change, it may not perform any better.

After a record-breaking year for IPO deal flow in 2021, 2022 was mostly a bust. According to Barron’s, only 37 companies went public last year, raising $7 billion, the lowest amount since 1990. What is the root cause? Companies were unable to obtain the desired stock valuations as the Federal Reserve aggressively raised interest rates in order to slow spiralling inflation. For the majority of the year, the stock market fell, affecting even the most powerful and stable companies.

Philos Partners has identified five IPOs that appear to have the greatest chance of success, with the hope that the year 2023 will provide a more favourable environment for going public.

Stripe is a software platform that facilitates online payment processing and serves as a credit card transaction gateway. This greatly simplifies the checkout process for businesses.

Its software-as-a-service (SaaS) offerings make conducting business transactions simple and time-saving for online vendors. Furthermore, it safeguards its customers by preventing suspicious transactions and reporting any potentially fraudulent payments.

The firm’s technology enables businesses to easily collect payments and transfer money across international borders. Amazon, Alphabet, Shopify, Lyft, and Twilio are just a few of the well-known customers of Stripe. Using its network, over fifty different companies processed at least $1 billion in transactions, and the company handled $640 billion in payments overall in 2021.

Arm, which was founded 30 years ago, is one of the world’s largest semiconductor companies. It has shipped over 230 billion chips worldwide, and its technologies affect roughly 70% of the world’s population.

Arm reported $656 million in revenue and shipped 7.5 billion chips in the most recent quarter, up 9% year on year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) were $326 million. Growth was seen in all market segments, with automotive and IoT (Internet of Things) solutions performing particularly well. The company is also investing in the emerging metaverse category.

Arm is now considering a public offering. SoftBank Group CEO Masayoshi Son has expressed a preference for the shares to be listed on the NASDAQ. While a deal is unlikely to occur until March 2023, according to Reuters, Arm is one of the most anticipated IPOs for next year.

VinFast, a Vietnamese electric vehicle (EV) manufacturer, has filed for a US IPO on December 6, 2022. It is expected to list on the Nasdaq under the ticker ‘VFS’ in the first half of 2023.

To complete the US offering, the company will convert to a Singapore public limited company called VinFast Auto Ltd. The number of shares available and the price range have yet to be determined. It will be the first Vietnamese company to list on a US exchange if it is successful.

The IPO is intended to raise capital to fund VinFast’s planned US expansion with a plant in North Carolina. The plant’s production is currently scheduled to begin in 2024, giving the company a deadline for raising funds.

Epic Games is a video game developer best known for its Fortnite gaming franchise, which has over 350 million users worldwide. While Fortnite is free to play, Epic Games earns money through V-bucks, which players can use to purchase customised gear and unlock additional game features. According to a 2018 study, 70% of Fortnite users buy digital items, and the series grossed $1.8 billion for the game creator in 2019.

It raised $2 billion from investors in April to fund its metaverse vision, giving it a private valuation of around $29.5 billion.

Impossible Foods creates plant-based meat products sold by Burger King, Starbucks Corp., and other partners. Across three continents, the company’s products can be found in nearly 25,000 grocery stores and 40,000 restaurants. In November 2021, Impossible’s most recent fundraising round valued the company at $7 billion. 

For more on these or any other opportunities in 2023, please contact Philos today.

Sean Mortimer
Philos Partners
+353 818 882 184
email us here

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