Following a lackluster 2022, the IPO market continued to flounder during 2023, partially attributable to ongoing macroeconomic uncertainty and geopolitical uncertainty, including sustained high interest rates, the banking crisis in early 2023, continued geopolitical conflicts in Ukraine and Gaza, and challenging market-wide conditions including inflation, the downgrading of the U.S. credit rating, and continued recessionary fears. As we move through the coming year, what should potential issuers expect?

In Going Public: U.S. IPO Report, our team reviewed the deal terms of approximately 215 of the IPOs that priced between 2020 and 2023 with base deal sizes over $75 million, excluding SPACs, direct listings, real estate investment trusts (REITs), and business development companies (BDCs) to uncover key takeaways for the 2023 IPO season.

Some of the leading market trends included:

• The IPO market showed significant year-over-year growth, but still lagged well behind historical norms;
• The SPAC boom has officially ended;
• There was a significant increase in mid-size IPOs; and
• It remained difficult for mega IPOs to make it out the door.

As we look forward, we should expect cautious optimism as the reining sentiment, as a backlog of companies have been waiting for the right time to go public, while stabilizing inflation and interest rates from the end of 2023 support expectations of a more active IPO market in 2024. We also expect the latter half of the year will be more active, though unforeseen geopolitical events or macroeconomic occurrences could stymie an uptick in the IPO markets, while the SEC’s forthcoming major rule adoptions will present additional considerations for companies seeking to go public. Please read the report below for a full analysis of our findings.