US IPO Market Outlook: Bankers Prepare for a Surge into 2026

2023 US IPO Market Performance

• 📊 The US IPO market is expected to close the year around $45 billion, excluding SPACs.
• 🎯 This figure is more in line with the decade's average pre-pandemic, representing a step in the right direction but not the significant uptick bankers anticipated.
• 💡 While there have been more billion-dollar-plus IPOs, the market has been waiting for mega IPOs from tech and private equity firms for three years.

IPO Activity and Expectations

• 🚀 The year 2021 saw nearly $200 billion in US IPOs (excluding SPACs), a stark contrast to the current year's volume.
• 🚗 Companies like Rivian, once one of the largest IPOs, have not lived up to their initial expectations.
• 💰 Private equity firms have been looking to offload investments, but significant capital remains available, potentially delaying further IPOs.

Outlook for 2026 IPOs

• 🌟 There is considerable anticipation for 2026 to be a breakout year for IPOs, with potential listings from SpaceX and Fannie and Freddie.
• 📈 The expectation is for a decrease in continuation vehicles, with significant deals like Copeland, Ringworld, and Jio Platforms potentially coming to market.
• ❓ Key concerns for the buy-side include understanding the debt ratios and acceptable valuations for these large offerings.

Crypto IPOs and Market Volatility

• 📉 Several crypto firms, including Grayscale and Kraken, have been rumored to be preparing for IPOs, but market instability poses a risk.
• ⚠️ The recent pullback in Bitcoin and pressure on Coinbase have forced a rethink of these plans, especially with potential shifts in DC policy.
• ⚖️ A change in the political landscape in Washington could significantly impact business models centered around crypto trading and holding.

IPO Market Performance Metrics

• 📈 The Renaissance IPO index is up about 10% year-to-date, while the weighted average return for US IPOs is around 12%.
• 📉 This performance underperforms the S&P 500 by about 5-6%, which is contrary to the expectation that IPOs should outperform the broader market.