IPO Market Trends & Outlook 2025

It's no secret that the IPO market has been sluggish since 2021. Market volatility, geopolitical instability and increased interest rates are just a few of the forces that have tampered enthusiasm for initial public offerings. Fortunately, the trend in the first half of 2024 has shown some signs of improvement. According to the most recent figures, there were 94 total IPOs in the first half of the year, with roughly $18.5 billion in capital raised through those efforts. This represents an increase of more than 80% when compared to the same period in 2023. In addition, there is a solid pipeline of companies waiting to join the party. However, stability in interest rates and the economy, as well as the listing companies’ willingness to accept valuation resets, will determine how quickly we see pipeline movement. Read on to learn more about IPO trends that includes predictions for IPO volume as we move into 2025.

IPO Market Trends

Although there will always be uncertainty impacting the IPO market, the good news is there are positive indicators that may be harbingers of good IPO trends in the coming year. Of late, the Dow Jones has cracked through the 40,000-point barrier and appears to be holding steady,  and inflation seems to be on the decline. Perhaps most importantly, the Fed recently announced an interest rate cut, giving investors good news.

Taking a look at the overall market given these new conditions, there are a few rising IPO trends to highlight.

Consumer products, pharmaceuticals, life sciences industries lead IPO market

One of the most consistent IPO trends over the last few years has been the dominance of consumer products, pharmaceuticals, and life sciences companies. So far, 2024 has been no exception. Roughly 27% of IPOs in the first half of the year were made up of these companies, representing a slight decline over the same period in 2023 but still a significant portion.

Technology sector strengthens

For the moment, AI continues to be a hot commodity within the IPO market. Companies that specialize in this technology are leading the way in driving higher IPO activity. The strong investor interest they’ve generated has been a major contributor to IPO proceeds almost doubling from 2023 to 2024.

Presence of SPACs continues

Special purpose acquisition companies (SPACs) continue to make their presence felt in the IPO market. According to the latest figures, they made up about 16% of all IPOs for the first half of 2024.

Electoral and economic uncertainty

As everyone already knows, 2024 is a presidential election year. As such, many IPOs may be on hold until the political landscape becomes more stable and companies can plan ahead with greater certainty. Expect a surge in IPO activity in 2025 as companies who held their breath finally relax.

Global companies listed on U.S. exchanges

Among global IPO trends, there has been an increase in international companies seeking listing on the U.S. exchanges. Investors see this as a natural way to diversify their portfolio and enjoy gaining access to international companies through their U.S. listings.

IPO Deal Volume & Proceeds Trends 2024

Based on the activity in the first half of the year, it’s expected that by the time the calendar rolls over to 2025 there could be as many as 180 IPOs in 2024. This is being driven largely by the tech sector as well as SPACs, consumer products, and the pharma/life sciences sectors.

Notable IPOs in 2024

No roundup of global IPO trends would be complete without a mention of some of the more buzzworthy public offerings that broke out in 2024.

Top notable IPOs and potential IPOs of the year include:

• Astera Labs: Buoyed by the continued interest in AI-related companies, this cloud and AI infrastructure company had a strong opening day in March. Initially priced at $36, it closed up more than 72% on its first day of trading.
• Reddit: Social platforms continue to draw plenty of attention from investors, as evidenced by this stock’s healthy performance on its first day. Opening at $34 per share, it closed at more than $50.
• Rubrik: This cybersecurity company benefited from the frenzy surrounding tech stocks at the moment, debuting at $32 per share and closing up more than 15% on its initial day of trading.
• Viking Cruises: Anticipating a rebound in consumer interest in cruises, Viking announced plans to expand its offerings as it entered the market. Its opening-day price was set at $24 and it closed the day slightly higher as investors responded.
• Tempus AI: This AI-driven healthcare tech firm saw a nearly 36% increase in its stock price on the first day of trading as investors got excited by the company’s upside in the AI-driven landscape.
• Waystar: Healthcare technology firms continued to win by and large throughout the first half of 2024. This payment tech company launched its IPO at $21.50 per share, and saw a 25% jump in price by the end of the first day.

How to Prepare for an IPO as an Aspiring Company

Preparation is key when it comes to IPO readiness.

While there have been impressive deals as of late, there is no certainty when it comes to valuation and public sentiment. External forces such as geopolitics can foster rapid changes in the market's appetite for IPOs. Companies should monitor the environment, potentially lower their valuation expectations, and be ready to charge forward or pull back.

Meanwhile, companies can tap into the trends that excite investors, such as ESG. Having clearly defined, quantifiable ESG goals is a surefire way to give investors what they want, and perhaps the key to a successful IPO in 2024.

IPO Market Outlook for Remainder of 2024

As many predicted, tech IPOs continued to make their presence known in the market, and they are one of the primary reasons why it hit record highs in the first half of 2024. It stands to reason, then, that these should hold steady as one of the key motivators for investors, and should have a ripple effect on other related areas such as utilities companies.

Despite the challenges posed by the presidential election, global conflicts, and ongoing volatility in the markets, it’s not hard to see how optimism will continue to be one of the prevailing IPO trends for the latter half of 2024.

Financial data suggests there will be continued opportunities through the end of the year for companies especially those with strong growth, positive cash flow, discounted valuations relative to peers, smaller share floats, and cornerstone investors. When it comes to preparing for an IPO, don't underestimate the importance of IPO software for getting organized, communicating value, and demonstrating priorities (including ESG) to stakeholders. DFIN's IPO software helps companies accelerate their IPO or SPAC timeline while staying organized from the roadshow and S-1 filing through to post-IPO daily operation.