2019 IPOs: Your Definitive Guide and How to Profit

Keith Fitz-Gerald Dec 05, 2018

The slate of 2019 IPOs could make it the biggest year for public offerings ever.

At least 10 companies slated to go public next year are valued at over $1 billion. The companies range from the trendy sharing economy… to data analytics… even to social media unicorns.

And we want help Total Wealth readers stay up to date on exactly which companies are going public. So, we’ve created a list of the biggest and most important 11 companies on our radar right now.

Plus, we’ll even reveal one way to get in on the ground floor of America’s hottest new industry…

2019 IPOs to Watch, No. 1: Uber

The first 2019 IPO on our list has a shot at being one of the biggest IPOs ever. The Uber IPO may be the most hotly anticipated IPO of 2019. And for good reason.

It’s valued at a staggering $120 billion right now.

In less than a decade, Uber has added “ride share” and “call an Uber” into our everyday vocabulary as it’s all but destroyed the taxi industry. Taxi medallions in New York City have plummeted by 87% over the last five years. Medallions used to fetch up to $1.3 million as recently as 2013. Today, they can be bought for just $160,000.

Uber was able to do this by reinventing the ride-for-hire industry.

Instead of operating a fleet of cars and employing dispatchers, drivers, and mechanics – the way traditional cab companies have done for decades – Uber simply connects contract drivers with riders through its app.

Drivers aren’t Uber employees, but can be anyone with a reliable car who passes Uber’s screening process, so Uber has no overhead cost for driver salaries or vehicle supply. That allows Uber to reduce costs for riders.

Plus, Uber’s strategic “surge pricing,” which ratchets up the cost of a ride based on demand, ensures there are plenty of drivers on the road to connect with passengers in need of a lift.

And between Uber’s convenience, cost, and nicer cars, riders are simply bypassing taxis and public transportation altogether.

Now, Uber’s working to develop self-driving vehicles to carry fare-paying passengers, a move that could change transportation as we know it.

This sort of tech-based disruption is exactly what has investors salivating over the Uber IPO.

But there are some hitches in Uber’s plans. The company has been trying to pull itself out of three major controversies.

First, founder and former CEO Travis Kalanick stepped down from Uber in June 2017 amid growing criticism of his leadership style.

Kalanick reportedly ignored complaints of sexual harassment at the company while other reports publicized his abrasive behavior. That included a video of him screaming at an Uber driver.

The new CEO, Dara Khosrowshahi, is tasked with turning around the company’s public image and internal culture ahead of a public offering.

Second – and another big obstacle for Khosrowshahi – is dealing with the legal battles stemming from Uber’s cutthroat style of business.

Uber just settled a lawsuit that Alphabet Inc. (NASDAQ: GOOGL) brought against the company alleging Uber stole intellectual property for self-driving cars from a Google engineer. Google is competing with Uber in developing a commercially viable autonomous vehicle. Uber agreed to shell out $245 million to Google, plus 0.34% of equity in the company to settle the suit.

Now, Uber has to contend with a Department of Justice investigation into Uber’s practices of evading law enforcement.

Some places banned Uber or had strict regulations on ride-for-hire companies that kept Uber from operating. Some cities, including Seattle, have alleged Uber developed software called “Greyball” meant to disguise Uber’s operation in their cities and mislead law enforcement.

Even with the setbacks, Khosrowshahi is still eyeing a 2019 IPO date, so this still has the potential to be the blockbuster IPO we’re all expecting.

And it will have some serious competition…

2019 IPOs to Watch, No. 2: Palantir

You might not know much about the second company on our list. Its business is highly secretive, which has helped it fly under the radar. But with an astounding $41 billion valuation, the Palantir IPO has the chance to be the biggest of the year.

Here’s what we know…

Palantir was co-founded by Peter Thiel in 2003 and develops software to analyze “big data,” the sprawling data sets too big for most commercial software to compute.

That may not sound like the most exciting business, but there’s nothing boring about the value of the big data trend. Companies are realizing how much they can learn about their business by using software to analyze their data, whether it’s insurance companies identifying new risk indicators or government intelligence agencies mining their troves of reports for patterns.

And with the growth of the Internet, troves of new data are created almost daily. Facebook Inc. (NASDAQ: FB) mines its users daily usage to deliver custom advertisements. Every click, like, comment, and even the time spent on a page is analyzed by machine learning algorithms to develop targeted advertisements.

That’s why the big data analytics industry is already worth a whopping $200 billion.

Palantir is already emerging as a leader in the industry, too. Palantir’s analytics helped the U.S. government track down Osama bin Laden, and the company boasted revenue of $750 million this year, compared to $600 million last year, a 25% jump.

The Wall Street Journal reports Palantir is slated to go public in the second half of 2019, but it’s possible the company will remain private.

It very well could, too.

As companies seek to create more data to analyze, personal privacy has become a major advocacy issue.

Facebook has been mired in a scandal over personal data being handed over to Cambridge Analytica during the 2016 election, while the EU just passed the General Data Protection Regulation (GDPR) that regulates how digital companies can collect and use information on their users. Privacy advocates have even protested at Palantir’s headquarters in Silicon Valley.

The company might decide to avoid the publicity an IPO would bring in this climate.

But the next company on our list is on a glideslope for a 2019 IPO, and it just raked in over $1 billion in revenue in just the last quarter…

2019 IPOs to Watch, No. 3: Airbnb

Airbnb has disrupted the travel and lodging industry much the same way Uber has disrupted transportation.

Airbnb allows users to list their homes, apartments, or rooms for short-term rentals. Guests reserve the rooms and pay online. The model allows for Airbnb to get a cut of every rental without having to own and maintain the individual properties. It also means guests can find a place to stay when traveling without paying a premium price for a hotel.

Over 150 million people in 190 countries have used Airbnb already, and there are over 4 million active listings.

And it’s been massively lucrative. The company made $1 billion in revenue in Q3 this year and notched a $31 billion valuation during its last round of funding in 2017. That valuation could go even higher before a public offering, especially since the start-up is already profitable, a rarity even among the unicorns.

Airbnb’s profitability and billions in revenue should allay concerns over the company’s regulatory hurdles. Some cities are concerned Airbnb threatens revenue or could drive down property values if quiet, non-commercial neighborhoods become flooded with travelers each weekend. Plus, hotel interest groups are not happy the upstart has avoided paying tourism taxes or abiding by zoning regulations hotels must meet.

A widespread crackdown on Airbnb could threaten the company’s bottom line. But with over 81,000 cities with Airbnb listings, it’s unlikely to put a dent in the company. That’s not to mention the potential consumer backlash.

2019 IPOs to Watch, No. 4: Lyft

Like its rival Uber, the Lyft IPO is another widely anticipated 2019 IPO. And even though Lyft has played little brother to Uber since it was founded in 2012, it’s avoided Uber’s scandals.

Uber’s troubles have helped boost Lyft’s market share over the last two years. Lyft now controls 29% of the market while Uber has 69%, but Uber controlled over 87% of the market at the start of 2016, while Lyft controlled roughly 15%.

Lyft’s growth coming at just the right time could make it the better bet in 2019, when it potentially debuts on public markets in March or April.

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The ride-share firm racked up a valuation of $15.1 billion during its last round of funding in June, roughly a quarter of Uber’s valuation. Considering Lyft now controls about a third of the ride-share market, this could represent a substantial value over Uber’s massive price tag.

Lyft operates much the same way as Uber, with riders connecting with drivers via its app. But Lyft has put an emphasis on having friendly drivers, often encouraging passengers to sit in the front seat instead of the back. And you may also recognize Lyft drivers’ purple dash lights, another way the company has tried to distinguish itself from the scandalized Uber.

Plus, Lyft has plenty of room to expand. It currently only operates in the United States and Canada, but a broader international push is coming. And while Uber is jockeying with Google to mainstream autonomous vehicles, Lyft is rolling out new transportation sharing idea, including bike shares.

Lyft just bought Motivate, the largest bike-share company in the United States, this summer for $250 million.

That’s a massive industry on its own, and our next IPO is one of its hottest new companies…

2019 IPOs to Watch, No. 5: Lime

You may have already seen its ubiquitous scooters and bikes around your city, but you might not know Lime is another unicorn. The $1 billion valuation behind the Lime IPO continues the trend for a blockbuster year for IPOs.

Lime, founded in 2017, already boasts a $1.1 billion valuation and has backing from both Uber and Alphabet. Uber hopes to make Lime’s fleet of shareable scooters and bikes available within the Uber app, making it a one-stop shop for getting around town and fighting back against Lyft’s growth.

Currently, Lime’s shareable scooters and dockless bikes are strategically placed throughout cities, allowing anyone with the app to unlock, ride them, and leave them at their destination. At night, Lime pays nearby residents to collect and charge the scooters.

Analysts are now dubbing these scooters “last mile transportation,” as riders will be able to get from trains stations and bus stops to their final destination.

But plenty of users are simply using the scooters instead of public transit or taxis. These scooters can travel up 37 miles on a single charge.

As for Lime’s profitability, Quartz estimated each scooter could bring in $11 a day for Lime, while other analysts project revenue potential could soar to $760 million per year if the company reaches all U.S. markets.

Since the company is still private, its revenue from each scooter is still unknown, and we don’t know its expenses to keep the fleet available. Lost, stolen, or vandalized scooters are a risk to the company’s business model, along with government regulations banning their use.

Cities from Los Angeles to Stockholm are banning the use of dockless scooters, calling them a blight on the city. Other regulators fear they will lead to a rise of traffic fatalities as users ride in traffic without helmets.

But Lime isn’t the only scooter company with an IPO slated for 2019…

2019 IPOs to Watch, No. 6: Bird

Just like Lime, Bird operates a fleet of 1,000 scooters across 18 cities.

While Bird is the smaller of the two shareable scooter companies eyeing 2019 IPOs, investors are just as bullish on its prospects.

Bird already raised $300 million in 2018, pushing its valuation just north of $2 billion.

It will use the funds to expand into more cities, including going international. One of the largest backers, B Capital, is heavily investing in the Southeast Asian market, and that could be a sign of where Bird will head next.

Bird has also worked with cities to overcome the regulatory risk that threatens the industry. By sharing data with cities and working directly with public officials, Bird is helping change the narrative about scooters in cities. After all, fewer cars on the road means less traffic, and city politicians love those results.

We still don’t have an exact IPO date, but the trajectory the company is going makes 2019 a real possibility.

2019 IPOs to Watch, No. 7: Slack

Slack is a software-as-a-service (SaaS) firm focusing on office productivity. It also has a massive $7 billion valuation, making it one of the biggest potential IPOs on our list.

And it’s one of the most sought-after companies by investors. It’s one of the most successful tech start-ups that hasn’t been bought out by a larger firm, giving investors the opportunity of getting in on the ground floor of a potential giant.

Slack is essentially a messaging service for businesses. Employees can communicate with each other directly, in groups, or manage a project with multiple stakeholders. Slack allows users to quickly find what they’re looking for and keep tasks and projects organized. Users can attach or share files, send reminders, or even log progress so team members can stay up to date.

Plus, Slack offers several other features that have made it a hit in offices across the world. It seamlessly integrates across all devices, so workers can move from computers to tablets to phones throughout the day without missing a beat. It can also integrate with other apps, connecting users’ Slack accounts to e-mail accounts, calendars, or social media. And its “Slackbot” functions as a personal secretary for users. Users can ask it questions, tell it to find documents, automate tasks, and set reminders by interacting with the bot.

But there are at least two huge reasons Slack could grow into one of Silicon Valley’s biggest companies: its ubiquity and its subscription business model.

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Unlike most software providers, companies don’t simply purchase a software package or license – they pay Slack an annual subscription fee to maintain the service. This ensures yearly revenue flowing to the company without having to develop and market new software every year.

And it’s been hugely lucrative.

Earlier this year, Slack boasted 3 million paid users worth $300 million in annual subscription fees. That’s up from 2 million paid users just a year ago. Crunchbase, a tech news site, estimates Slack could claim as much as 4.5 million subscribers or $450 million in revenue by the time it goes public in 2019.

The messaging company just raised a whopping $427 million this year alone, and it’s raised over $1 billion since its 2013 founding.

Slack has been gearing up for an IPO since 2017, but it’s taking firm steps toward an early 2019 IPO, according to The Wall Street Journal. However, CEO Stewart Butterfield called the potential IPO a “multiyear process” in an interview earlier this year.

2019 IPOs to Watch, No. 8: Pinterest

Pinterest could be the next social media IPO, giving investors the tantalizing opportunity of jumping on the next Facebook.

But unlike Facebook, Pinterest isn’t plagued with problems of privacy breaches or declining usage. And while it’s a social media company that encourages users to “share” with others, it’s not the sort of sharing that will push into Congressional crosshairs like Facebook’s.

And Pinterest is wildly popular. Pinterest now has 200 million monthly active users, nearly 20 million more than Snapchat. Pinterest users “pin” images, recipes, designs, or ideas to their “board.” Pinterest users use their board to keep track of things they like or plan to do and share their boards with likeminded friends and family.

But Pinterest goes one step farther. Users can search others’ boards to find ideas, and advertisers are loving the data it’s creating.

This sort of sharing is extremely valuable for the firm because it shows exactly which hobbies or products users are interested in or are planning on buying, giving advertisers precise data to use in targeted ads.

Pinterest has turned that data into nearly $1 billion in revenue this year, nearly double last year’s revenue of $500 million. That’s earned the social media firm an eye-popping $15 billion valuation.

Executives have kept a tight lid on possible IPO dates, but analysts expect it to go public in 2019.

2019 IPOs to Watch, No. 9: Instacart

Instacart is a grocery delivery service. And it’s raised nearly $1 billion this year.

Customers in all 50 states can use Instacart to order groceries online and have them delivered to their homes roughly an hour later. The company partners with more than 300 grocers, including Kroger Co. (NYSE: KR), Whole Foods, and Costco Wholesale Corp. (NASDAQ: COST).

In total, Instacart works with 15,000 grocery stories and has 50,000 customers, and that’s made it hugely lucrative. The company is valued at $7.6 billion, even after Amazon.com Inc. (NASDAQ: AMZN) bought Whole Foods and threatened to derail Instacart’s business.

So far, Amazon’s emergence in the sector hasn’t hurt Instacart, but it’s raising more money just in case. But Instacart’s relationship with Whole Foods could be threatened in the near term.

While the company hasn’t announced an IPO date, CEO Apoorva Mehta said it’s “on the horizon,” and that very well could be 2019.

Our next IPO is expanding the food delivery business to restaurants…

2019 IPOs to Watch, No. 10: Postmates

Postmates is another $1 billion food delivery company, but instead of just delivering groceries, which Postmates also does, it brings its customers food from their favorite restaurants.

And a Postmates IPO is nearly inevitable in 2019. CEO Bastian Lehmann even said “we have a beautiful path to an IPO in 2019.”

The company already raised $785 billion dollars from funding rounds this year too, stretching its valuation to $1.2 billion.

But with the company handling 3 million deliveries a month and claiming it turned a profit off of $1 billion in gross sales last year, the valuation makes sense.

On the other hand, Postmates has plenty of competition. Amazon and Instacart threaten grocery delivery market share, and DoorDash, Uber Eats, and Grubhub Inc. (NYSE: GRUB) compete for takeout delivery dollars.

The competition has forced Postmates to innovate. Postmates now offers a subscription service that provides free delivery to subscribers who pay the $9.99 monthly fee.

The heavy competition also makes an IPO even more likely. The company can use the added revenue from the sale to go on the attack against its rivals. And the market could be favorable for Postmates, too. Grubhub’s share price has more than doubled since it went public in 2014.

2019 IPOs to Watch, No. 11: Cloudfare

Cloudfare is a jack-of-all-trades web services firm. It specializes in content delivery, digital security, and website management.

With a valuation of $3.5 billion, Cloudfare will make its public debut early in 2019. The firm has already hired Goldman Sachs Group Inc. (NYSE: GS) to lead the offering, so there’s not much speculation about the firm’s plans here.

What makes Cloudfare unique – and worth $3.5 billion – isn’t that it offers a wide range of services, it’s that it’s able to make a noticeable impact with its clients. Cloudfare’s services can help websites load faster, even while making them more secure.

Fast-loading sites and ironclad security are essential to e-commerce, and companies with a digital presence are willing to fork over a lot of cash to get it. Cloudflare’s small-business plans start with a subscription of $200 a month per domain, and its plans for larger businesses are negotiated.

With 10 million client domains, Cloudfare’s SaaS model has the potential to be a major cash generator. We won’t know exactly how much money the company is earning until it files for an IPO, but it’s already raised $110 million from the likes of Alphabet, Microsoft Inc. (NASDAQ: MSFT), and Baidu Inc. (NASDAQ: BIDU).

But while these potential IPOs are exciting, you don’t need to wait for a public offering to get in on the ground floor of one of the most explosive investing opportunities we’ve seen in generations…

How to Profit from One of 2019’s Hottest Trends

We know IPOs can be exciting. Getting in early on the next Apple Inc. (NASDAQ: AAPL) or the next Tesla Inc. (NASDAQ: TSLA) could be life-changing.

But as you can see from our list, there’s a lot of speculation about which companies will actually go public this year. Several of the companies, like Uber, have been publicly mulling an IPO for years.

You simply can’t afford to wait on one of these companies to go public.

And while an IPO might be the first chance retail investors have to buy these companies, private investors see it as their first chance to cash in. These lofty valuations – based on little more than guesses – combined with the hype of hitting the public markets make private investors’ shares worth even more.

That could mean you’re buying in just as the insiders are cashing out.

The good news is you don’t have to play the waiting game with these hyped-up companies like everyone else.

You can be an early investor in one of the hottest new industries we’ve ever seen.

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