Many companies were expected to list in 2021 but had to put plans on hold. This was due to an uncertain market characterised by rising inflation, supply chain disruptions, market volatility and tightening monetary rules. Companies claimed they wanted to wait until 2022 to see whether the market would improve. With the lie of the land now looking clearer, here are four rumoured start-up initial public offerings (IPOs) on investors’ watchlists in 2022.
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Is the UK market looking better for IPO listings in 2022?
Inflation is still on the rise and impacting the IPO market. However, economists believe there are plenty of reasons to remain optimistic. In fact, several IPOs have pending foreign listing approval, so we can expect to see several listings this year. However, the number of listings in 2022 may not be as high as in 2021.
Additionally, the revision of listing rules by the London Stock Exchange (LSE) to create a more relaxed and attractive environment, especially for start-ups, will most certainly attract many companies in the coming months.
Which start-up IPOs are on investors’ watchlists in 2022?
1. Huel
Around 25 November 2021, plant-based meal replacement maker Huel hired bankers to advise on an IPO. It’s still not clear whether a debut will occur, but it’s one worth keeping an eye out for.
The company makes dried meals, drinks, and complete food powders derived from plant ingredients containing many essential vitamins and minerals. And during the pandemic, its products gained high popularity in the fitness boom frenzy.
The company reported a £71.6 million turnover from July 2019 to July 2020, up £21.4 million on a year earlier, with an operating profit of £700,000 between July 2019 and July 2020. Huel is working with Goldman Sachs (GS) and JPMorgan (JPM), and a move could value it at around £1 billion.
2. Databricks
Artificial intelligence-powered data analytics company Databricks could go public anytime in 2022. It is valued at $38 billion (£28.3 billion) and draws comparison to Snowflake Inc., which made early investors 104% after shares rose from $120 (£89.5) to $245 (£182.7).
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3. Monzo
Monzo is a British online bank that has joined the tech companies looking to debut on the stock market this year. It faced a series of setbacks that led to a slashing of its valuation in 2020, but it closed a successful $500 million (£373 million) funding round and is now valued at $4.5 billion (£3.4 billion). Monzo has also secured a million new customers and seen an 18% jump in revenues.
4. Britishvolt
Battery technology company Britishvolt is aiming to build the UK’s first ‘gigafactory’, at a cost of £4 billion, to manufacture batteries for electric vehicles and energy storage. It’s rumoured that the company plans to select the LSE for its IPO following the UK’s plans to ease its stock listing rules.
In its latest funding round, the company was valued at more than $1 billion (£746 million), and it might be worth considering, especially with the increasing demand for energy transition investments.
How can you invest once these companies go public?
You can start by opening a share dealing account with a reputable broker. Another option is a stocks and shares ISA that shields your investment gains from tax. This way, you’ll be able to see a wide range of shares alongside individual winners. And if you’re just starting and need guidance, checking out the Motley Fools’ share dealing for beginners’ resource is an excellent move.
Finally, keep in mind that all investing carries risk. Carry out your due diligence before taking the plunge and seek professional advice if uncertain.
