Enroll Course

For the majority, the calendar year 2020 will forever be remembered as an annus horribilis, except for a few technology companies that successfully capitalized on a global shift toward remote work through successful initial public offerings (IPOs).

In 2020, US companies raised a record $435 billion in stock sales, with more than a quarter of that amount coming from initial public offerings (IPOs) — far surpassing 2014's record of $279 billion, according to Bloomberg data. The overwhelming majority of those new listings identified as technology companies.

Zoom, Snowflake, Asana, Airbnb, and Palantir all performed exceptionally well, and their stock prices continue to rise as remote work and e-commerce remain the norm for many into 2021.

The only remaining question is whether this trend will continue throughout the year. Numerous companies are eyeing an early 2021 debut to capitalize on favorable market conditions. However, as with all market debuts, timing will be critical, with a growing number of industry analysts warning of a bubble.

The Year's Largest Tech IPOs

The following are the year's largest technology initial public offerings.

Darktrace

Darktrace, a UK cybersecurity company, listed on the London Stock Exchange on April 30, with shares surging 43 percent to £3.58 on the first day of trading. This is an increase from the company's guide price of £2.50, valuing it at around £2.4 billion.

The Cambridge-based firm, founded in 2013 by a group of mathematicians and ex-intelligence agents, analyzes enterprise data using machine learning techniques to assist in detecting and responding to cyber security threats. It earned nearly $200 million in revenue in its most recent fiscal year, while earning a small profit of $9 million.

Darktrace is also still embroiled in a legal battle with founding investor Mike Lynch, who is facing extradition to the United States on fraud charges stemming from Hewlett-$11 Packard's billion acquisition of his company Autonomy.

The cybersecurity firm followed Trustpilot and PensionBee in recent successful tech IPOs on the London Stock Exchange, all of which performed better than food delivery company Deliveroo, which had a disastrous debut.

PensionBee

On April 21, PensionBee successfully floated on the London Stock Exchange, pricing shares at £1.65, in the middle of its pre-IPO range of £1.55-£1.75. This values the company at £365 million.

PensionBee's core product enables customers to consolidate multiple pensions into a single plan that is accessible via web and mobile apps.

Coinbase

Coinbase, the company behind the popular cryptocurrency exchange, listed on the Nasdaq on April 14, with shares surging as much as 71% in their initial public offering, up from their $250 reference price. The stock closed at $328.28 on its first day, valuing the company at $85.8 billion, more than double the market capitalization of Swiss mining giant Glencore or America's oldest bank BNY Mellon.

Coinbase chose a direct listing over a traditional initial public offering, in which no new shares are created and no underwriters are involved — a strategy that has proven successful in the past for technology companies such as Spotify, Slack, and Palantir.

Coinbase, based in San Francisco, has 6 million monthly active users who use its platform to trade cryptocurrencies such as Bitcoin and Ethereum. In 2020, the company made headlines after CEO Brian Armstrong published a divisive blog post prohibiting employees from discussing or engaging in social or political causes. He became one of America's wealthiest entrepreneurs this week.

Coinbase earned $1.3 billion in revenue last year, up from $534 million the year before, and expects to earn $322 million in profit in 2020, up from a loss of $30 million in 2019, according to a filing with US securities regulators.

UiPath

On April 21, UiPath closed at $69 on the New York Stock Exchange, up 23% from its guide price of $52-$54 and valuing the software company at $35.8 billion. The company most recently raised $750 million in Series F funding in February 2021, valuing the company at $35 billion post-money.

UiPath was founded in 2005 in Romania and specializes in Robotic Process Automation (RPA) software that aims to eliminate repetitive menial tasks and free up employee time. Customers include Cleveland Clinic, which used UiPath software to register patients at COVID-19 testing locations and print labels automatically.

UiPath's revenues are rapidly increasing, reaching $608 million in the most recent fiscal year, while the company posted a narrowing net loss of $92 million, down from $519.9 million in 2019.

Digital Ocean

Digital Ocean's initial public offering on the New York Stock Exchange on March 24 was a disappointment, with the stock falling 9.6 percent on the first day. The New York-based cloud computing company initially priced its initial public offering at $47, which was above the expected range of $44 to $47. It closed at $42.50 per share on its first day, valuing the company at $4.5 billion.

Digital Ocean markets itself as a simple platform for software developers to quickly spin up and host cloud applications on virtual private servers (VPS); it competes with large cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud, as well as Platform as a Service providers such as Heroku, a Salesforce company, and VPS vendors such as Linode.

As is the case with many technology companies during their initial public offering, Digital Ocean is not profitable, reporting a net loss of $44 million on revenue of $318 million in 2020.

Qualtrics

Qualtrics, based in Utah, went public on Jan. 28, less than two years after being acquired for $8 billion by German software giant SAP on the eve of its first planned IPO in 2018.

Qualtrics initially priced its initial public offering at $30 per share, the upper end of its expected range, before exploding 52 percent on its Nasdaq debut. It closed at $45.50 per share, giving the company a market capitalization of $27.3 billion.

Founded by brothers Ryan and Jared Smith and their father, Stuart Orgill, as the fourth co-founder,

Qualtrics began as an online survey software provider before evolving into a platform that enables large companies such as Disney, BMW, and Adidas to collect a variety of "experience data" from their employees and customers.

Qualtrics performed admirably as a SAP subsidiary, increasing revenue by 30% in the first three quarters of 2020 to $550 million. However, it continued to operate at a loss of $244 million, with $218 million in stock-based compensation significantly distorting that figure.

SAP will retain a majority stake in the vendor following the IPO, and private equity firm Silver Lake now owns slightly more than 4% of the stock. Since acquiring majority ownership of the NBA team the Utah Jazz last year, Ryan Smith has taken a step back from the day-to-day operations of Qualtrics.

Trustpilot

Trustpilot listed on the London Stock Exchange on March 23, and its stock surged as much as 11% on debut, reaching £2.95 per share, up from the offer price of £2.65 ($3.65). This values the business at £1.1 billion.

The Danish company aggregates independent reviews for online businesses and estimates that it will have accumulated up to 120 million reviews by the end of 2020, covering everything from utilities providers to yoga studios. It generates revenue by selling subscriptions to businesses interested in incorporating consumer reviews into their marketing campaigns. In 2020, revenue increased by 25% to $102 million, despite a $12.2 million loss.