Initial public offerings aren’t just startup success stories. The six IPOs we have our eye on this year tell us what’s so unique about the tech scene they grew out of: like payments unicorn Flutterwave from Nigeria, where fintech startups are taking over traditional and legacy industries, and Chinese social video and photo sharing platform Xiaohongshu, the latest in a long line of Chinese companies to seamlessly combine existing services, integrating e-commerce with an Instagram-like social video and photo app.
One thing we’re watching for in 2022? More IPOs outside of the U.S. After Chinese ride-hailing giant Didi delisted from the NYSE in December, the next crop of successful Chinese companies are expected to list in Hong Kong or Shanghai rather than New York. And last year, exchanges from Mumbai to Jakarta revamped their rules in the hopes of attracting more high-profile floats.
From a fintech giant in Africa to a resurgent wellness platform in Latin America, these are some of the most interesting companies outside the West likely to go for an IPO in 2022.
GoTo
Country: Indonesia
Founders: Kevin Aluwi, William Tanuwijaya
Key Investors: Tencent, Temasek, Abu Dhabi Investment Authority
Expected valuation: $25–$30 billion
If 2021 was the year of a record-breaking boom for Indonesian IPOs, 2022 is the year to shine for homegrown unicorns. And the candidate leading the list is behemoth super company GoTo, born from the merger of ride-hailing and payments giant Gojek and e-commerce site Tokopedia. GoTo has plans for a listing in Jakarta as early as the first quarter this year — at a whopping $30 target valuation. A secondary offering in the U.S. is expected to follow later in the year. GoTo closed a $1.3 billion pre-IPO fundraising round in November 2021 that included a star-studded cast of international investors, like Tencent, Temasek, Google, and the Abu Dhabi Investment Authority.
Though last year was an unparalleled one for Indonesian listings, including an IPO for online shopping giant Bukalapak, the country’s first homegrown unicorn, the story isn’t all rosy. Bukalapak’s stocks crashed just days later. The country’s growing ranks of retail investors, many of whom are newcomers, complained about overinflated expectations and misleading information on social media. The online hype cycle hasn’t stopped dozens of other Indonesian companies from advancing plans to go public this year, like PT Global Digital Niaga (the parent company of e-commerce site Blibli) and share-trading platform Ajaib.
Rappi
Country: Colombia
Founders: Felipe Villamarín, Sebastián Mejía, Simón Borrero
Key investors: Sequoia Capital, Andreessen Horowitz, SoftBank Vision Fund
Funding raised to date: $2.7 billion
Although Colombia’s last-mile delivery unicorn suffered from layoffs in 2020 and was dogged by complaints of poor service last year, growing reliance on delivery during the coronavirus pandemic ultimately gave a huge boost to Rappi. The company raised over $500 million in funding during 2021. Capitalizing on that momentum, one of the company’s executives told reporters at a conference last year that the SoftBank-backed startup would look to an IPO in the first half of 2022, though company representatives said that was only the executive expressing his personal feelings.
Rappi currently operates in nine countries and is valued at over $5 billion. Rappi depends on more than 150,000 contractors, many of whom are Venezuelan migrants, to not only deliver goods like groceries but also to offer what it calls “whims” and “favors”, which include services like selecting and delivering gifts. The delivery giant already offers some financial services in Colombia, Mexico, Brazil, Peru, and Chile and has plans to expand into full banking services.
The pandemic e-commerce boom already fueled Colombia’s first book-building in nearly a decade, when warehousing and logistics company LatAm Logistic Properties last year filed for the country’s first IPO since 2002. Though the loss of its investment-grade rating may have dampened prospects for listings on the BVC, the country’s growing e-commerce unicorns could help it begin to bounce back.
Gympass
Country: Brazil
Founders: Cesar Carvalho, João Barbosa
Key investors: General Atlantic, SoftBank Vision Fund
Funding raised to date: $525 million
The NYC-headquartered, Brazil-founded B2B wellness startup initially struggled during the pandemic as gymgoers stayed home. But with vaccinations on the rise, 2021 saw Gympass bounce back stronger than ever, beating pre-pandemic numbers with 4 million monthly check-ins across its network and expanding offerings across Mexico and the U.S.
The SoftBank-backed company is like ClassPass for businesses, which pay a flat rate for their employees to have their pick of wellness plans that encompass physical and mental health, sleep, and nutrition. Gympass is now valued at over $2 billion, putting it in the ballpark of Brazilian neobank Nubank, which became Latin America’s most valuable financial firm with its $41 billion listing on the NYSE in December 2021. In 2019, there were just four tech companies listed in Brazil. By mid-2021, that number was up to 16. The question for Gympass will be whether to continue the trend or follow the well-trodden path of pursuing a listing in the U.S.
Flutterwave
Country: Nigeria
Founders: Iyinoluwa Aboyeji, Olugbenga Agboola
Key investors: Y Combinator, Tiger Global
Minimum estimated valuation: $1 billion
In Nigeria, fintechs have dominated startup funding since 2019, when $350 million went to three fintechs in one week. Ever since, digital financial services companies have clamored to cater to the 36% of adults left out of the country’s formal financial system. Homegrown payments unicorn Flutterwave has done a series of partnerships to make payments easier, including investing in regional payments startups, like CinetPay, and a collaboration with PayPal, which allows merchants across Africa to receive payments from anywhere in the world. Nigerian pop star Wizkid, known for working alongside the likes of Drake and Beyoncé, also signed on as a brand ambassador.
While Flutterwave has been rumbling for nearly a year about a possible U.S. listing, digital payments in Nigeria have been surging, topping $256 billion in 2019. Lagos’ NGX also relaxed some rules last year in a bid to encourage more companies to consider listing there, though so far that hasn’t attracted many takers.
Swiggy
Country: India
Founders: Nandan Reddy, Phani Kishan Addepalli, Rahul Jaimini, Sriharsha Majety
Key investors: Y Combinator, Tiger Global
Estimated valuation: $10.7 billion
Food delivery startup Swiggy shines bright among possible Indian IPO contenders this year. Last year, the Zomato competitor closed a $1.5 billion fundraising round, led by SoftBank’s Vision 2 Fund, and Masayoshi Son himself has expressed confidence that a Swiggy offering would deliver good returns. But if payment giant Paytm’s underwhelming post-listing performance is any indicator, it’s uncertain how many companies will hurry to put themselves out there with India’s stock market regulator’s new rules on the block.
After a flood of more than 100 companies, many of which remain unprofitable, rushed to list in Mumbai in 2021, the Securities and Exchange Board of India (SEBI) tightened restrictions in order to pump the brakes. Stars like beauty company Nykaa, food delivery giant Zomato, and payments platform Paytm grabbed headlines last year for their massive floats. But the rush to list wasn’t met by sustained excitement from shareholders: Anchor investors were previously required to hold onto their shares for one month post-IPO, and when their respective months were up, share prices for both Paytm and Zomato tumbled over 7%, as investors sold off. Now, SEBI says, anchor investors have to hold onto at least half their initial investments for a few months longer. But experts warn that public interest in flashy listings for still loss-making companies may be waning.
Xiaohongshu
Country: China
Founders: Charlwin Mao Wenchao, Miranda Qu
Key investors: GGV Capital, Tencent, Temasek, Alibaba
Expected valuation at IPO: $18 billion
Nowhere is e-commerce booming bigger than in China. Mainstay image-based social media platform Xiaohongshu — “Little Red Book” — enables shoppers not only to share curated images and lifestyle content but also to post product reviews. The company has become a top e-commerce destination and claims more than 200 million monthly active users and a valuation upward of $18 billion.
Since Chinese regulators ramped up scrutiny over firms listing overseas, requiring companies with data on over a million Chinese users to undergo a stringent security review, the Tencent- and Temasek-backed answer to Instagram is expected to list in Hong Kong rather than the U.S. Podcasting and audio content platform Ximalaya similarly rethought plans to go public in the U.S., opting for Hong Kong instead — the first in a string of high-profile Chinese IPOs that are expected to follow suit.
It’s a separation that’s been a long time in the making: on the U.S. side, the Securities and Exchange Commission has sought stricter oversight and access to Chinese companies listed in the U.S., and Chinese companies have had to jump through the hoops of structuring themselves as variable interest entities, in order to make an IPO outside China. The “mutual decoupling” achieves the regulatory aims of both Washington and Beijing, while also keeping the gains from the explosive growth of China’s tech scene firmly inside the country, harnessing the power of homegrown tech giants for domestic benefit.
