The US IPO market reach a two-year high in the second quarter of 2024, with 35 IPOs launched. However, the market is still recovering and not yet back to pre-pandemic levels.
The second quarter of 2024 saw a surge in IPOs, the highest number since the first quarter of 2022. Despite the increase in activity, investors remain cautious and selective about valuations. The US IPOs launched spanned various sectors, indicating a broader market recovery. While the U.S. market showed improvement, global IPO activity remained largely stalled.
US IPO Market Activity since 2021
US IPO activity since 2021 has been a rollercoaster ride, characterized by a record-breaking surge followed by a significant slowdown. Here’s a breakdown:
US IPO Market 2021: The SPAC Boom and Record Highs
- 2021 was an unprecedented year for IPOs, with over 1,035 companies going public.
- Special Purpose Acquisition Companies (SPACs) played a major role, accounting for over 600 IPOs.
- The technology and healthcare sectors were particularly active.
- This surge was fueled by low interest rates, ample liquidity, and investor enthusiasm for high-growth companies.
US IPO Market 2022: Regulatory Scrutiny and Market Cooling
- The IPO market cooled significantly in 2022 due to several factors:
- Increased regulatory scrutiny of SPACs
- Rising interest rates
- Inflation concerns
- Geopolitical tensions (e.g., the war in Ukraine)
- The number of IPOs dropped sharply, and many companies delayed or canceled their plans to go public.
US IPO Market 2023: Continued Slowdown and Shift in Investor Sentiment
- The slowdown continued in 2023 as investors became more cautious and selective.
- Valuations for many high-growth companies came under pressure.
- The focus shifted towards companies with strong fundamentals and profitability.
- 2024: Signs of Recovery, but Still Below Peak Levels
US IPO Market 2024: The second quarter of 2024
- Q2 saw a two-year high in IPO activity, indicating a potential recovery.
- However, the overall market remains well below the peak levels of 2021.
- Investors are still cautious, and many companies are opting for alternative funding options.
Overall, The US IPO market is highly sensitive to economic conditions, regulatory changes, and investor sentiment. The SPAC boom of 2021 was an anomaly, and the market is now returning to a more normalized pace. Investors are increasingly prioritizing profitability and sustainable growth over hype and speculation. While there are signs of recovery, the IPO market is still facing challenges and uncertainties.