2020 was an eventful year for IPOs despite the economic hardships caused by COVID-19. Over $300 billion was raised in U.S. equity markets, with companies from the tech sector generating a significant amount of hype.
Among these companies were Airbnb, DoorDash, and Snowflake, all of which raised over $3 billion. To put this into perspective, let’s look at the 10 biggest U.S. tech IPOs of all time.
The Top 10 U.S. Tech IPOs
Airbnb, DoorDash, and Snowflake muscled their way into the top 10, raising a combined $10.3 billion dollars in the second half of 2020.
|Rank||Company||IPO Date||Amount Raised (USD billions)|
|3||Agere Systems||March 2001||$4.1|
|9||Altice USA||June 2017||$2.2|
Not adjusted for inflation.
More than eight years after going public, Facebook maintains a sizable lead over industry peers. The $16.0 billion IPO by the social networking company is also the second largest in U.S. business history, falling only shy of the $17.9 billion raised by Visa in March 2008.
The Airbnb IPO
Airbnb is an online vacation marketplace that connects vacationers with “hosts” who offer accommodations for short-term booking. Since its creation in 2008, Airbnb has grown in size and influence, disrupting the hotel industry in the process.
Airbnb’s IPO raised $3.5 billion by selling 51.5 million Class A shares at $68 each. Airbnb shares closed 112% higher after their first day of trading on December 10, a sign of strong investor optimism.
The Snowflake IPO
Snowflake is a data-warehousing company that provides its customers with cloud-based data storage services. Noteworthy clients of Snowflake include CapitalOne, Logitech, and the University of Notre Dame.
Snowflake’s IPO raised $3.4 billion by selling 28 million Class A shares at $120 each. Similar to Airbnb, shares of Snowflake made an impressive climb on their first day of trading, even surpassing the $300 mark. With this achievement, Snowflake became the largest company to double its market cap on opening day.
The DoorDash IPO
DoorDash is a food delivery platform similar in concept to Uber Eats and Grubhub. The business was well-positioned to take advantage of COVID-19 lockdowns which had led to a surge in food delivery orders.
DoorDash’s IPO raised $3.4 billion by selling roughly 33 million Class A shares at $102 each. Like its peers, DoorDash rose on its first day of trading, closing at $189.51 a share.
Investor Optimism Outweighs Traditional Thinking
A common factor among each of these tech IPOs is that none of the companies have turned a profit. This has drawn criticism from members of the investment industry, especially regarding DoorDash’s IPO.
This is Silicon Valley selling public markets an asset at a huge premium…and I think a lot of individual investors rushing into this are going to lose a lot of money.
—David Trainer, CEO, New Constructs
Regardless, DoorDash investors remain bullish. As of February 3, 2021, the company’s shares have climbed 27% year to date (YTD).
»If you found this article interesting, you might enjoy this post on the world’s largest IPOs.