4 Tech IPOs We Want In The Second Half Of 2015

So far this year the market has seen a wave of successful IPOs, especially in the technology industry. In the month of June alone there were 35 IPOs, with tech companies like Alarm.com, AppFolio (APPF) and Xactly (XTLY) going public (read Tech IPOs: What Investors Need to Know).

As the first half of 2015 wraps up, it’s time for investors to start looking ahead at the rest of the year. With so many successful IPOs recently, we’d all like the wave to continue with some of the bigger brands in tech that are still private. Based on the most recent rumors and trends, we at Zacks have compiled a brief list of the technology companies we’d like to see go public in the second half of the year.

1. Uber

Headquartered in San Francisco, Uber has quickly grown to become one of the biggest names in transportation around the world. Operating under the slogan “Everyone’s Private Driver”, Uber allows users to request taxis and cars to their location through a mobile application. Their groundbreaking “ride-sharing” business model allows almost anyone with a car to work as a privately contracted driver, keeping operating costs and prices incredibly low.

The possibility of Uber going public has been circling the rumor mill for a while, and recent moves by the company makes it look like an IPO is in the near future. Uber recently received an investment from Chinese fund manager Hillhouse Capital Group that could reach up to $1 billion, indicating that the company is trying to drive up revenue (read Will Ube Be the Hottest IPO of 2015?).

The company could be trying to drum up investments after recent reports have suggested Uber is operating with losses of nearly $500 million, and a successful IPO could further raise much needed funding.

Uber also faces controversy elsewhere, with protests from conventional taxi drivers have reaching the point of violence in Paris, as many have become disgruntled with Uber undercutting their market. Regardless, Uber is becoming a massive brand name, and with their apparent need for good press and new cash, an IPO could be exactly what this company needs.

2. Pinterest

Pinterest is a fascinating combination of social media and online scrapbooking. The website allows users to “pin” topics and posts to their own “pinboards”, which can be shared with others. These pins can be anything from wedding pictures to recipes or DIY home projects. The website makes money from allowing companies to run their own accounts and pin their products, while also providing a “buy” button, allowing Pinterest to function as an online marketplace of sorts.

In less than 5 years, Pinterest expanded rapidly, with a current market valuation of over $11 billion. Growth like that should get investors excited for a future IPO. Assuming Pinterest can continue to grow at a similar rate, while also riding the trend of recent IPO success, we want a Pinterest IPO sooner rather than later (see Is Pinterest a Top IPO Candidate for 2015?).

3. Airbnb

Airbnb is both a website and mobile application that connects travelers with homeowners around the world. Renters can list their personal homes, guest rooms, or empty apartments at whatever rate they choose, creating a unique and affordable lodging experience. The company has nearly a million listings in 192 countries worldwide. (Read Is Airbnb a Strong 2015 IPO Candidate?)

Similar to Uber, Airbnb has cornered the market by cutting costs through “sharing.” With a valuation of over $13 billion, Airbnb is worth more than many massive hotel chains, including Wyndham, InterContinental Hotels, and Hyatt.

We hope to see Airbnb break in to the market soon to get in front of controversies and competition. In many cities, for owners to list properties like they do on Airbnb special permits are needed, which Airbnb does not currently require. This could possibly be a source of future problems. Also, as competitors like 9flats and Roomorama start to copy the business model, Airbnb needs to break into the market and raise the cash their IPO will bring soon.

4. Snapchat

Created by a trio of former Stanford University students, Snapchat is a mobile application that allows users to share pictures and videos for limited amounts of time before they disappear forever. The company has tried to expand simply image sharing and now offers live video chatting similar to Skype, as well as a real-time payment system similar to Chase QuickPay. The app is estimated to have anywhere between 100 million to 200 million active users ( Inside Snapchat: IPO Coming in 2015?).

Evan Spiegel, CEO and co-Founder of Snapchat , recently made public comments on the company’s plans for an IPO, saying “We need to IPO. We have a plan to do that.” However, nothing has been filed with the FEC yet and the company has not released an official timeline. Spiegel has recently sought additional funding that valued the company at $19 billion.

Snapchat would be one the last of the major players in social media to go public, with Facebook (FB - Analyst Report) and Twitter (TWTR - Analyst Report) already on the market. With a valuation that high, we’d like to see Snapchat’s IPO this year.

Bottom Line

We’ve established that the IPO market has been hot lately, with a lot of technology companies jumping in on the fun. What these companies have in common, aside from the fact that they haven’t gone public, is their innovation, large user base, and massive valuations.

When companies create good, sound products or websites like the four listed above, investors should be eager to get their slice of the pie. We’d like to see these companies ride the IPO wave in the second half of 2015 and look for more coverage from us as their inevitable public offerings approach later this year or next.