Pre-IPO Investments in Companies That Are Changing Traditional Markets
Companies at the Pre-IPO stage are perhaps the most attractive segment for investment. They already have a popular product and stable revenue, but the value of their shares is not yet as high as that of public enterprises.
One of the ways to invest in such projects is to buy futures for their shares on the UTEX exchange. Futures for shares of such well-known companies as SpaceX, Zipline, Impossible Foods, StoreDot, Eat Just, and several dozen more promising projects are traded here, which are estimated at hundreds of millions and billions of dollars today.
We will tell you about several of them in more detail, and then we will look at how you can buy futures on their shares.
Artificial eggs and meat for vegans
Stanford biochemist Patrick Brown founded Impossible Foods in 2011. Today it is one of the largest producers of meat substitutes from vegetable raw materials. Artificial sausages and burgers from Impossible Foods are sold in more than 20 thousand stores around the world, including Burger King and Walt Disney chains.
According to Reuters, since the beginning of 2021, Patrick Brown's company has been exploring the possibility of a public listing in the next 12 months. However, before that, it may well organize another round of financing. According to the results of the last stage in March 2020, the project was estimated at $4 billion, today its cost is approaching $10 billion.
While Impossible Foods successfully makes vegetable meat, another promising startup, Eat Just, produces vegetable analogs of eggs. The company was registered in the same year 2011 in California. Two years were devoted to research and development, as a result of which Eat Just launched its starter product — JUST Mayo vegetable mayonnaise.
But the main product of Californians was an egg made of vegetable components, laconically called JUST Egg (“just an egg”). You can buy it in 20 thousand stores and almost a thousand restaurants, including in the American chains Walmart and Whole Food Markets, as well as on the Chinese website Alibaba.
According to the official reports of the manufacturer, more than 100 million JUST Egg eggs have already been sold to date. According to numerous customer reviews, such a replacement for eggs is liked not only by vegetarians but also by adherents of the traditional diet.
Artificial eggs are not the only achievement of Eat Just. At the end of 2020, the company launched the production of artificial chicken meat. The world's first license for the manufacture and sale of the product was issued by the Food Agency of Singapore. The uniqueness of chicken from Eat Just is that it is not made from vegetable raw materials, but is derived in the laboratory from chicken cells. Such meat under the GOOD Meat brand can already be tasted in one of the Singapore restaurants.
The production of vegetable analogs of meat, which has all the useful properties and does not require the slaughter of animals, is very promising today. In particular, analysts at Barclays bank predict rapid growth in this direction in the next 10 years. According to their estimates, the artificial meat market will soon reach $140 billion and will account for 10% of the total meat market.
In March 2021, Eat Just conducted another round of financing, managing to attract another $200 million from the Qatari Sovereign Fund and several other investors. At that time, experts estimated the project at $1.2 billion. Even though the management of Eat Just does not disclose financial information, its founder and CEO Joshua Tetrick said that the company plans to reach a profit by the end of 2021.
Drones for the vaccine
An equally interesting project, whose stock futures are available on UTEX, is being implemented in the field of logistics. The California-based company Zipline delivers medical equipment, drugs, and vaccines using drones. It has been successfully developing since 2014, creating and using vehicles capable of flying at a speed of 100 km/h and carrying up to 1.75 kg of cargo.
Zipline services are widely in demand on a global scale. The main customers are Americans and several African countries. For example, in Ghana, the company has already delivered almost 2.5 million doses of various vaccines using its own drones. Among them are several thousand doses of the COVID-19 vaccine. In addition, drones deliver various medical preparations and blood for transfusion to remote rural areas.
In March, Zipline announced an upcoming partnership with Toyota. With the help of their drones, the Japanese plan to deliver medicines and equipment to the most remote areas of the country. A year earlier, cooperation with the American network Walmart was confirmed for the transportation of medicines and small goods from supermarkets directly to customers ' homes.
To date, the company is estimated by experts at $3.5 billion. Since its foundation, several funding rounds have been conducted with a total result of $500 million. Among the investors of the project are Sequoia Capital, Google Ventures, and Goldman Sachs. As for the prospects of Zipline, experts predict that by 2025 the market for delivery using drones will reach $50 billion.
Charging electric cars and gadgets in five minutes
Many promising companies that are changing traditional markets today were invented in Silicon Valley. These giants are still planning to enter the stock exchange, which means that private investors have a great opportunity to get their piece of the financial pie.
In particular, the futures of some well-known “silicon” corporations are already being traded on UTEX. There are others with no fewer achievements and potential. For example, StoreDot is a project created in 2012 in Israel.
In 2014, the company presented a prototype of its battery, which was able to fully charge the smartphone in 30 seconds. The secret of the device is in silicon nanoparticles, with which the developers replaced the usual graphite in a lithium-ion battery. Thanks to the new technology, the time required to charge gadgets and electric vehicles are reduced by tens and hundreds of times.
In just a few years of operation, StoreDot has already received more than a hundred patents for inventions, and at the beginning of 2021, it launched mass production of batteries for ultra-fast charging of electric vehicles. The first batch of devices was delivered to car manufacturers and related corporations to demonstrate the declared capabilities. By the way, it is the automotive industry and the technology industry that are most interested in StoreDot's developments. In 2017, it was their representatives — Daimler and Samsung-who invested $60 million in the company's financing round. In total, StoreDot has attracted investments worth about $ 140 million.
In 2020, Bloomberg New Energy Finance included StoreDot in the list of 10 companies that are changing the rules of the game, and in March 2021, it was reported that the company plans to enter the stock exchange by merging with SPAC. Experts have estimated it at $3.5 billion. However, while StoreDot remains private, one of the most obvious ways for non-professional investors to invest in it is to buy stock futures on UTEX.
Pre-IPO investments on UTEX
The UTEX exchange initially specialized in trading cryptocurrencies. The platform, developed by a team of professional traders, combined a lot of technological tools for both beginners and advanced users. Then other products were added to them. Today, the main directions of UTEX are cryptocurrency trading and investments in the US stock market. The second direction is implemented through trading futures on company shares.
Pre-IPO investments have so far been inaccessible to retail investors. Thanks to UTEX, it became possible to invest money in the most famous and promising projects through the purchase of futures. The underlying assets are shares of companies that, according to analysts, will become public in the next 1-3 years.
However, futures are not only an investment but a much more flexible tool. With its help, you can trade, making a profit from fluctuations in the prices of the underlying asset. It works quite simply. First, UTEX analysts choose a company with a popular product and high potential. Primary liquidity is provided by a market maker — a professional market participant who owns these shares, which means that he can cover the risks associated with opening short positions. The market maker issues futures on UTEX secured by shares and sets the initial price for them. And then the price of futures depends only on the bidders. The exchange rate is regulated by supply and demand, and the market maker only supports liquidity.
Trading continues until the target scenario occurs. If a company goes on an IPO, the automatic closing of positions (the so-called expiration) occurs 200 days after the start of public trading of shares. At this point, all futures held by users are automatically sold.
However, there is no need to wait for the expiration to make a profit from the sale of futures. You can buy and sell them many times at any stage of the Pre-IPO, choosing the most interesting price and playing on the difference in exchange rates.
Why it is profitable to trade futures
The UTEX exchange not only provides an opportunity to buy and sell stock futures but also provides traders with all the tools for successful trading.
The platform has a functional interface that is equally convenient for both beginners and professional participants. For example, one of the most useful functions is a warning about too high a difference in prices for buying and selling, which signals low liquidity. If the price difference between the purchase and sale exceeds 3%, a warning is immediately issued about this.
Another interesting point is the so-called "price protection". The mechanism is triggered when there is insufficient supply at the stated price, blocking transactions at less favorable prices. The user can be sure that his request will be executed only at the price that he specified. Judging by the reviews of traders, this option seems very useful to them. The commission for trading operations with stock futures is 3%. It can be reduced to 1.5% by paying for transactions with internal tokens UTT.
Conclusion
For the first time in the history of the stock market, retail investors have the opportunity to invest money in projects on a global scale. A good solution for them was to buy futures on shares of private companies that have already got on their feet and are often valued in billions of dollars but have not yet entered the public market. Such investments are characterized by relatively low risk and high potential profitability.
At the same time, futures is also a flexible financial instrument that allows you to actively trade, making a profit from exchange rate fluctuations. In the hands of an experienced trader, it can become an excellent source of income.