MarketsNov 7, 2024
The IPO Market Is Still Thawing, But Returns Among New Listings Are Raising Hopes for a 2025 Revival
Equity Climate
Noah Weidner
Discover
After a punishing two years for IPOs, 2023 marked a comeback year for new listings — and in 2024, the years-long thaw in the IPO market is still going strong. The Renaissance IPO ETF, which tracks the performance of newly-listed firms for up to three years post-listing, is up 28% year-to-date — narrowly outstripping the S&P 500 and Nasdaq-100’s 26% and 27% return. While that may not seem like a big difference, the performance of new listings is notable, given the fact they are divorced from large-cap indexes — a sign of warm tidings for recent IPOs.
The strong performance in 2023 could help reverse the chilly conditions the IPO market has experienced, especially following a record-setting 2021 and then a steep decline from 2022 to 2023. So far this year, IPO fundraising has jumped 64% YTD — and 2025 could build on that boom with the return of The Donald and Republicans possibly encouraging more companies to head to Wall Street.
Then what is going public? A SoftBank Vision Fund survey found that 59% of its portfolio company CFOs expect IPOs to return in 2025, supported by favorable interest rates and market conditions. Although many companies are still on the fence, others like Stubhub, Navan, and Klarna are ready to rock. Additionally, The Information reports that investment banks like Goldman Sachs and JPMorgan are eying crypto clients for potential IPOs next year, fueled by a more supportive environment for digital assets.
