Equity Pipeline

The IPO Market Is Still Thawing, But Returns Among New Listings Are Raising Hopes for a 2025 Revival

By Noah Weidner
image (4)

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 ETF has been led by hot new listings like CAVA Group, Reddit, and Arm Holdings — which have surged 242%, 159%, and 119% YTD, respectively.
  • Half of the 32 stocks in the Renaissance IPO Index have outperformed the S&P 500 this year, with an average return of 34% across the index.

The Donald Phenomenon

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.

  • ICR Capital’s Steve Parish told Bloomberg that the election outcome could “provide a boost to encourage [companies] to push forward” with 2025 IPO plans.
  • However, an anticipated increase in listings from European and Chinese firms might be derailed by Trump’s proposed new tariffs, which could give rise to a fresh freeze in new listings.

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.