The tech IPO frenzy at the beginning of the pandemic came to an abrupt end in 2022 as capital dried up after the Fed raised interest rates.
Now, money flows a little more freely. The number of companies going public in the first quarter of 2024 is the same as last year, but the amount of capital raised has nearly tripled ($7.8 billion), said Will Breitigham, Deloitte's U.S. capital markets transactions leader.
Additionally, while IPOs in the first quarter included many companies in the life sciences and consumer industries, more companies in the technology space are announcing plans to launch initial public offerings (IPOs). Much of that trend is due to: Astera Research Institute and reddit— AI startup and established social media company with two of the biggest IPOs of the year so far, raising a total of $1.5 billion. Brautigam said the early success has encouraged companies that had considered going public last fall but decided not to due to market volatility to plan and price their IPOs. These companies include Colorado-based technology company Ibotta, Inc.; The long-awaited IPO The goal is to raise $100 million by the end of March. Also, rubricis a data security software provider that filed for an initial public offering on Monday and also plans to raise $100 million.
Astera Labs and Reddit's stock prices have come down from their spectacular highs, but they still trade well above their IPO prices (twice in Astera's case). Their continued prosperity remains to be seen, but Especially for Reddit —Determines whether the “Minitech IPO Window” is maintained.
“These larger, early IPOs are getting a lot of attention. [in 2024]And their performance will be key to opening up what I've been calling a mini-IPO window into a larger IPO window,” Breitigham told Quartz.
Despite the uncertainty an election year brings to the market, Brautigam expects companies to raise at least about 50% more capital this year through IPOs.
With stock market volatility down and the Fed announcing plans to cut interest rates this summer, “valuations are starting to get higher,” he said. The plan may be frozen.
In terms of numbers
$1.46 billion: Funds raised by Astera Labs and Reddit from IPO
98.6%: How much did Astera Labs stock rise from its IPO price of $36 on Tuesday?
$30 billion to $35 billion: The range of capital that Breiutigam believes it can raise through an IPO in 2024, taking into account fluctuations due to the US presidential election.
$40 billion: Braeutigam estimates that the typical amount of money raised in an IPO over the past 10 years
