Platforms were the theme of the 2021 IPO: will profits follow?
Looking back on the year, it might be too much of a stretch to say that PSPCs and IPOs have sizzled in the payments space.
But things have certainly – well – filtered out.
And in looking back over the 12 months that brought us into another year of the great digital shift, some themes solidified:
Payment platforms have of course caught the attention of public investors, as the private sector has brought new issues to Wall Street and markets around the world. And by digging a little deeper, the banking and professional sectors are leading the pack, with 71 and 61 registrations respectively.
But in a market environment that had seen its share of dynamism – where the highly technical NASDAQ, for example, jumped 26% over the year – it is not true that a general rising tide raised all of them. businesses.
Anecdotes abound, of course, of failed IPOs – stocks that trade below their offer prices – and flat returns. Take, for example, the super app that was listed in December at just over $ 13, ended the year at just over $ 7. Robinhood, the platform that has sought to expand the appeal of retail investing, especially among younger people, went public in July, initially selling shares for $ 38, and ended the year at a just under $ 18. The Coinbase crypto platform went public in April, with an initial “benchmark” price of $ 250, jumped north of $ 320, and most recently was listed at year-end at $ 252.
Then there are companies like Global-e Online Ltd which have seen exhilarating returns, up over 150% to $ 63, from $ 25 when it was originally listed. The company’s platform helps corporate clients tackle direct-to-consumer cross-border commerce.
Operating results matter
You get the picture, and a point-by-point list of these companies and their performance can be a bit like building a scatterplot. But overall, the typical characteristics of investing could (reasonably) apply in a world that continues to be rocked by viruses and variants. The technology is only part of the picture here. Platforms that bring together buyers and sellers – or senders and recipients, or link a range of activities under a single digital umbrella – can spark interest in the streets. But investors, on the whole, like to see the profits in hand. Black ink on the line of operations can prove elusive, at least for a while, for companies looking to be disruptors like Robinhood (to give just one name). And the specter of regulation can spark volatile sentiment for names like Coinbase.
We note that companies operating internationally – and so-called blank check companies targeting deals that in turn promote new technologies in emerging markets and beyond – continue to grab the headlines.
In last week’s examples, SHUAA Partners Acquisition I, with a focus on the Middle East, North Africa and Turkey, has filed for a quote of up to $ 200 million. In its filing with the SEC, the company said that âthe key areas of the tech space that have seen the greatest share of regional business flows include e-commerce (12%), tech space (12%). %), health technologies (5%), delivery and logistics. (5%) and foodtech (5%).
The dossier goes on to state that “these are the main areas of growth and funding … benefiting from the tailwinds of the COVID-19 pandemic and the need for increased digitization. These key industries ignore the wave of digital transformation of traditional industries and businesses, which has created the need for regional solutions for cloud communications, big data, gaming, learning and digital workspaces.
Separately, Ledger Acquisition, a PSPC that filed a $ 150 million IPO last week, said it would seek acquisitions in the FinTech and blockchain spaces.
âMany blockchain companies have matured over the past decade alongside the industry. For example, there are companies that design and manufacture chips and hosting hardware to secure the blockchain. Others facilitate the exchange of digital assets and provide accessible software to create, store and use digital assets. In the private market, the blockchain industry has been one of the most attractive sectors for investment in recent years, âLedger said in the filing.
They say that by investing, past performance is no guarantee of future results … but we bet platforms, payments and blockchain will continue to attract PSPC and traditional listing business.