The will long be remembered in the eyes of public market watchers as the year of WeWork. Once billed as the most valuable startup in the United States, the company unraveled in dramatic fashion after filing its S-1 with the SEC, thanks to numerous issues with the company's business model and management practices.
This event, along with a succession of dud listings from such big names as Slack and Uber, spooked the markets, with IPO registration withdrawals up almost 50 percent in 2019, according to research firm Renaissance Capital. This left a sizeable backlog of potential listings for 2020, with the holiday rental company Airbnb headlining that list.
This busy runway was set to lead to a bumper year, but then the novel coronavirus hit and everything went on ice, with just a handful of technology IPOs of note until a burst of activity in June brought the market back to life.
Here are the biggest technology IPOs of 2020 so far:
McAfee
Cybersecurity company McAfee had a disappointing return to being a public company in October, with shares falling by more than 6.5% during the first day of trading. Shares were priced at $20 each, which was on the low side of its expected range, raising $740 million for the company; it's now valued at $8.6 billion.
The company has spent the past decade under the ownership of Intel and private equity firms, most recently TPG, which spun the company back out of Intel in 2016 as a joint venture. It opted for a complex “Up-C” arrangement for its IPO, a mechanism that provides tax benefits to insiders. Intel and various private equity investors will also retain an 80% majority of voting power.
McAfee made a profit of $31 million on revenues of $1.4 billion in the first half of 2020 after recording net losses of $236 million in 2019. It also carries a sizeable debt pile.
McAfee was founded by the controversial entrepreneur John McAfee, who hasn't been connected to the firm since the 1990's but who continues to bring negative brand association; he was arrested in October on tax evasion charges.
Palantir
Palantir Technologies had a solid market debut, opening at $10 a share — well above its reference price of $7.25, before dipping slightly to $9.50 at the close of its first day of trading in September. This valued the firm at almost $21 billion.
Palantir went public via a direct listing, an increasingly popular route that allows firms to avoid dealing with the cost of underwriting the IPO and the "lockup period" that prevents shareholders from selling immediately after launch. It means companies with lots of private funding, such as Spotify and Slack in the past, raise less money at IPO while providing more control over the process and rewards for longstanding employees.
Named after a set of magical stones in Lord of the Rings, the secretive Colorado-based company was founded 17 years ago by Peter Thiel and CEO Alex Karp, among others. It specializes in data analysis to help organisations spot patterns and identify threats through two products: Gotham and Foundry, which offer clients various flavors of data integration and analytics on a large scale. It has a small but select customer base, primarily in the public sector, including work for the US Department of Defense and the National Health Service (NHS) in the UK.
Like many of its peers in technology, Palantir was reporting a loss at the time of its IPO, with $743 million in revenue in 2019 at a loss of $576 million.
Asana
Floating on the same day as Palantir meant Asana got less attention on the day of its IPO, which may well suit its publicity-shy founder, Facebook cofounder Dustin Moskovitz.
Shares in the company opened at $27 each, up from a reference price of $21, representing a pop of around 30%. This valued the firm at more than $4 billion, more than double its last private valuation of $1.5 billion from 2018.
Asana offers a suite of cloud-based project management tools used by companies like NASA, Uber and Spotify. At a basic level, it allows teams to add tasks, assign them to team members, set due dates for completion, comment and share relevant documents. This has proved even more popular during the pandemic, where remote working is mandated.
Like Palantir, Asana also opted for a direct listing rather than a traditional IPO.
Sumo Logic
Following Snowflake's blockbuster listing, another software company – Sumo Logic – had a more modest first day of trading after its IPO on 17 September.
The monitoring specialist initially priced shares at between $17 and $21; these then climbed 22% on the first day of trading, closing at $26.88 and valuing the company at $2.65 billion.
The California-based firm specializes in machine data such as log analytics and security monitoring and competes with the likes of Splunk and Datadog, which both had a market cap of more than $26 billion at the time of the IPO. For the six months up to July 31, Sumo Logic lost $36 million on revenue of $97 million.
Snowflake
The biggest tech IPO of the year came in September, when cloud data warehouse vendor Snowflake arrived on the New York Stock Exchange. The San Mateo, Calif.-based company priced shares at $120, up from its initial pricing of $75-85. These immediately popped on the first day of trading, ending up by as much as 111% at $245 per share, raising $3 billion, the most ever for a software firm at IPO.
This put the company's value at $70 billion, almost six times the $12.4 billion private valuation the firm had when it raised money earlier this year and more than established tech firms like Twilio, Atlassian, Workday and Okta. Like many of its peers, Snowflake is not yet profitable, making $264.7 million in revenue in 2019, at a net loss of $348.5 million.
The company has grown quickly since it came out of stealth in 2014 with a built-for-the-cloud data warehouse, promising customers access to real-time analytics without the concurrency and performance issues customers of first-generation options like Amazon Redshift were facing.
JFrog
Playing second fiddle to Snowflake on 16 September, JFrog had a strong market debut of its own. Stock in the software company rose by as much as 62%, opening at $77 per share – up from its initial share price of $44. The stock closed at $64.79, valuing the company at $5.7 billion.
Founded in Israel in 2008 and now based in Sunnyvale, Calif., JFrog specializes in artifact management. It has since branched out into other important elements of the DevOps toolchain, all of which allows software developers to deploy changes faster.
Rackspace Technology
Rackspace Technology returned to the public market on 5 August when it arrived on the Nasdaq. After four years as a private company under the ownership of private equity firm Apollo, the cloud and infrastructure specialist priced its initial public offering (IPO) at $21 a share – on the low end of its target range of $21 to $24 per share – raising $704 million in the process.
Stock prices for the company fell by as much as 20% on the first day of trading, making it the worst performing IPO of $100 million or more on a U.S. exchange this year, according to data compiled by Bloomberg.
Lemonade
The Insurtech pioneer Lemonade floated on 2 July, with shares doubling during the first day of trading. The New York company originally priced shares at $29, slightly above its initial estimation of $26-28, but traded for as much as $64 on the first day, raising $319 million in the process.
Founded in 2015, customers engage with Lemonade through an AI bot on its website – called Maya – to assess eligibility for renters' or homeowners' insurance, a model which has proved popular with younger users.
The company insured 425,000 homes in 2018, up from 100,000 at the close of 2017, according to its S-1 filing. Revenue reached $67 million in 2019, with net losses of $109 million for the unprofitable company.
ZoomInfo
Not to be confused with the red-hot videoconferencing company Zoom, ZoomInfo (ZI) successfully debuted on the public markets in June, raising almost $1 billion as its stock rose 60 percent on its first day of trading, valuing the company at $13 billion.
The 20-year-old software-as-a-service (SaaS) company offers a variety of services aimed at helping sales and marketing teams reach more customers by using its rich B2B contact data.
Shift4 Payments
Shift4 Payments also priced its IPO above its range, at $23 a share, which trended upwards by as much as 45 percent on its first day of trading in June.
The Pennsylvania-based company, which processes business-to-business payments, was founded all the way back in 1994. The firm decided to push on with its IPO after it saw payment volumes start to recover in the spring.
“We have tons of data, and we started to see the recovery really in late March and through April, and then really accelerate in May,” CEO Jared Isaacman told Yahoo Finance. “That’s what gave us the confidence to kind of reignite the IPO process and get it going.”
Exasol
Database specialist Exasol floated on the Frankfurt Stock Exchange on 25 May at €12.74, becoming the first German company to IPO in 2020. The company raised €87.5 million ($96 million) in its first four days of trading as prices popped, before settling down at €11.89 in June.
Founded in 2000, the company has built an in-memory relational database for the cloud and rivals other options like Snowflake, Amazon Redshift and Teradata. It can be run in a hybrid model and on any of the major public cloud platforms.
Kingsoft Cloud
Kingsoft Cloud was the first Chinese company to go public in the United States when it floated on the Nasdaq on 8 May. The company raised $510 million at IPO, where it priced shares at $17, right in the middle of its expected range of $16 to $18. Shares jumped up by as much as 40 percent on the first day of trading.
Considered by many as the third place cloud services company in China, behind heavyweights Alibaba Cloud and Tencent, it was spun out of software company Kingsoft Corporation and is backed by technology giant Xiaomi, whose CEO Lei Jun is also the chairman of Kingsoft.