Investors eagerly await fresh opportunities after the disappointing performance of 2023’s IPOs failed to invigorate the stagnant market. Companies like ARM, Klaviyo, Birkenstock and Instacart entered the public market in the latter half of 2023, only to see their share prices plummet below opening prices soon after.
Market analysts are more optimistic about 2024, with companies like Skims, Stripe, and Shein all gearing up to go public. Analysts from Bank of America said they see a decline in inflation and anticipate equities reaching new highs in the coming year, suggesting a more favourable environment for IPOs where lower rates stimulate investor interest in speculative assets like newly debuted stocks.
In the Middle East, the volume of IPOs on regional bourses surged by 44% annually in the second quarter of this year amidst robust economic growth, according to EY. Growth in the number of deals was primarily driven by Saudi Arabia and the UAE, the top regional economies. The number of listings rose to 13 during the three months ending in June 2023, defying the global slowdown in equity capital markets activity.
In 2023, 48 IPOs raised $10.7 billion, of which five listed companies contributed 58% of the total IPO proceeds raised, mainly in the energy and logistics sectors. Investor confidence in the region continues, with 11 out of the 19 Q4 2023 IPOs recording a first-day gain in share price.
The 2024 pipeline includes 29 companies across various sectors announcing their intention to list, with the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) leading the way in terms of expected volumes. Outside the GCC, Egypt has four IPOs planned. Recent listings include Parkin and Spinneys.
Looking ahead, here are the top 10 IPOs to watch out for in 2024:
Shein
Valuation: $66 billion
The China-founded, Singapore-headquartered company is one of the biggest online fashion brands globally. It is known for its fast-fashion, bargain-priced model. Shein’s low prices have made it particularly successful with women in their teens and 20s, and it boasts 31 million Instagram followers.
The business generated $23 billion in revenue in 2022 and aims to raise its valuation to as high as $90 billion in its IPO. Its expansion plans and innovative marketing strategies make it a formidable contender in the e-commerce space.
Stripe
Valuation: $65 billion
Stripe is a fintech company that provides economic infrastructure for the Internet. Businesses of every size—from new startups to public companies—use Stripe’s software to accept payments and manage their operations online. Stripe’s suite of products includes payment processing, billing, payroll and more, making it a comprehensive solution for online businesses.
Although an IPO date is not confirmed, speculation suggests it could happen sometime in 2024. Reasons for the delay could include changing market conditions, regulatory considerations, or internal company priorities.
Databricks
Valuation: $43 billion
Databricks is a cloud-based platform that unifies and simplifies data systems. It has gained popularity since its founding in 2013. In 2015, Databricks achieved the popularity needed to become a highly valued company. In 2021, the company’s CEO, Ali Ghodsi, announced that it had completed a $1 billion funding round.
Databricks’ innovative data management and analytics approach has garnered widespread acclaim, attracting a diverse clientele across industries. Its commitment to open-source initiatives and cutting-edge technology positions it as a leader in the data analytics market.
Fanatics
Valuation: $31 billion
Fanatics is a major player in sports merchandise, expanding into digital collectibles, sports betting, and trading cards. Steps towards an IPO are evident, with strategic hires indicating a medium-term timeline. Fanatics’ strategic partnerships with major sports leagues and its foray into emerging markets like digital collectibles demonstrate its agility and foresight in adapting to evolving consumer trends.
Although the exact timing is not set, steps towards an IPO are evident with strategic hires, including Andrew Low Ah Kee as the CEO of its merchandise business and Deborah Crawford as the head of investor relations. The CFO, Glenn Schiffman, hinted at an IPO timeline in the medium term, possibly within the next 12 to 24 months, subject to business conditions and market dynamics.
Navan (formerly TripActions)
Valuation: $9.2 billion
Navan is an online travel management company that helps corporate clients manage travel, expenses, and more. Subject to market conditions, an IPO is expected within 12 to 24 months. Navan’s comprehensive suite of travel management solutions and emphasis on customer satisfaction have earned it a loyal customer base, paving the way for its anticipated IPO and future growth.
Navan customers can use the business’ travel payment cards and lines of credit or link existing Visa and Mastercard accounts to track spending, control purchases, and earn rewards points. According to the company website, Navan has about 2,000 employees and has worked with over 9,000 companies, including Databricks, Lyft, Adobe, and Netflix.
Waystar
Valuation: $8 billion
Waystar offers revenue cycle management solutions for the healthcare industry, serving over 30,000 customers. The company confidentially filed for an IPO in August 2023. It facilitated more than $4 billion in healthcare payment transactions last year, according to an S-1 filing with the US Securities and Exchange Commission.
In 2019, Swedish global investment firm EQT Partners and the Canadian Pension Plan Investment Board bought a majority stake in Waystar, valuing the healthcare technology company at $2.7 billion. Bain Capital retained a minority stake in the company.
Klarna
Valuation: $6.7 billion
Description: Klarna, a Stockholm-based buy-now-pay-later giant, is exploring an IPO in the third quarter of 2024, aiming for a $20 billion valuation. CEO Sebastian Siemiatkowski told Bloomberg in January that a US IPO was likely to happen “quite soon”, noting that the country is Klarna’s largest market by revenue, with over 37 million customers.
Founded in 2005, according to its website, Klarna offers credit to about 150 million shoppers globally looking to spread the cost of online purchases over multiple weeks. The website shows that it handles around 2 million daily transactions across 45 countries.
Skims
Valuation: $4 billion
Kim Kardashian’s shapewear brand, Skims, is reportedly considering an IPO in 2024. Recent funding rounds valued the brand at $4 billion. Jens Grede, the Swedish entrepreneur who co-founded the company with Kardashian, indicated an IPO is on the horizon for the wildly popular shapewear line after Skims secured a $270 million funding round earlier this year that valued the brand at $4 billion.
It’s unknown what valuation Skims is targeting for its IPO, but some analysts suggest the company is worth twice as much as its current value.
Etihad Airways
Valuation: Unknown
The UAE’s flag carrier, Etihad Airways, is actively preparing for a potential IPO, aiming to tap into different sources of capital. However, any IPO decision rests with shareholders. Etihad Airways’ reputation for exceptional service and its strategic position in the aviation industry position it for future growth and expansion, making it an attractive prospect for potential investors.
flynas
Valuation: Unknown
Saudi Arabia’s low-cost airline flynas confirmed plans to go public this year.
According to The National, the airline, backed by billionaire businessman Prince Alwaleed bin Talal, recorded a 32% annual increase in revenue to reach SAR 6.3 billion ($1.68 billion) in 2023, its CEO Bander Al Mohanna told the Airline Economics conference in Riyadh.
Saudi Arabia’s sovereign Public Investment Fund owns a 17% stake in flynas and is in talks to increase its holding in the airline, Bloomberg reported last year.
Flynas has been weighing an IPO since 2008 and hired Morgan Stanley, Citigroup Inc. and NCB Capital for a potential deal in 2018.
The airline is setting up local units in two more countries and expanding its jet orders to become the Middle East’s largest low-cost airline.
LuLu Group
Valuation: Unknown
LuLu, one of the largest supermarket chains in the Gulf, plans to list on ADX in the first half of 2024. The company aims to capitalise on a surge in regional listing activity as economies recover from the pandemic-induced slowdown.
LuLu’s extensive network of hypermarkets and its commitment to providing quality products at competitive prices has earned it a strong foothold in the retail sector, making it a promising contender for investors seeking exposure to the Gulf market.
