Coming down from the all-time high of IPOs in 2021, the last two and a half years in the public capital markets have felt lackluster. But is it really that bad? Below, we look at how the IPO markets have performed in the first half of 2024 compared with the past two decades, and we provide our thoughts on where the IPO market is headed.

IPOs by Volume and Value

The 2024 IPO market has shown a slightly more positive trend as the U.S. equity markets remain resilient amid higher interest rates, inflation, and an uncertain economic outlook. There were 43 IPOs in Q1 2024 and 51 IPOs in Q2 2024, for a total of 94 IPOs in the first half of 2024. Capital raised in IPOs during the first half of 2024 was $18.5 billion, nearly an 80% increase compared to the deal sizes seen during the same period in 2023, and nearly a 15% increase over the deal sizes in the first half of 2022.

The average number of IPOs over the last 20 years was 254 per year (214 per year when excluding outliers during the financial crisis in 2008-2009 and the “SPAC boom” in 2020-2021). Based on the number of IPOs during the first half of 2024, we calculated total IPOs in 2024 to be 188 on an annualized basis. This is an improvement over the number of IPOs in 2022 and 2023, and average deal sizes are up. However, it is still well below the average over the past 20 years.

IPOs by Volume (2000 – 2024)

*The first half of 2024 had 94 IPOs and is annualized to 188 for comparison purposes.

IPOs by Industry

Consistent with the prior year, the consumer products, pharmaceuticals, and life sciences industries played a large role in the IPO market in the first half of 2024 (27% of the total IPOs in the first half of 2024 and 33% in the first half of 2023). The technology industry also provided a boost to the IPO market this year and is on pace to have more AI-influenced deals than 2023, suggesting that companies embrace the new technology. Generative AI also continues to provide a halo effect on other technology companies, as well as energy and utilities in anticipation of increasing energy demand.

SPACs also continued to be a significant presence in the IPO market, accounting for nearly 16% of all IPOs in the first half of 2024. This signals to the markets that SPACs have not gone by the wayside following the SPAC craze in 2020 and 2021 as many expected, despite the additional regulation that followed.

The table below shows the IPOs in the first half of 2024 by industry.

Number of IPOs by Industry

IPO Outlook

There are many factors that will impact the IPO market in the second half of 2024, including interest rates, the U.S. presidential election, and geopolitical tensions.

Interest rates remain at their highest levels in decades, while the labor market showed signs of softening in July 2024. On August 23, 2024, Federal Reserve Chair Jerome Powell announced the beginning of a rate-cutting cycle in a much-anticipated speech. With the cooling of the labor market, Powell indicated there is a sustainable path to 2% inflation, and barring further significant deterioration in the labor market, the Fed would begin to ease interest rates when it meets again in September.

Companies considering an IPO are also accounting for the added uncertainty caused by the U.S. presidential election on November 5, 2024, and the geopolitical tensions arising out of the wars in Ukraine and Israel. While it is never easy to perfectly time an IPO, some companies may have decided it is better to wait until after the U.S. presidential election for more stable market conditions.

Despite the headwinds, the U.S. capital markets are still among the strongest in the world. With the anticipated interest rate cuts, we expect the IPO market will continue to open in 2025. And based on historical trends, there is often a significant uptick in the average number of IPOs during post-election years when compared to the average during election years, regardless of the party in the White House.

We expect IPO volume and value in 2025 will surpass the preceding three years, crossing the 200 threshold that we have not seen since 2021. We also expect the economic outlook will continue to favor technology and life sciences companies, with consumer products and manufacturing companies experiencing more drag from the effects of cooling inflation.

Russell Frank also contributed to this article.