The IPO Market in the US: 2023 and Beyond

The IPO market in the United States has been on a roller coaster ride in recent years. After a record-breaking year in 2021, the market cooled off significantly in 2022. However, there are signs that the IPO market is starting to recover in 2023.

In 2021, a total of 619 companies went public in the United States, raising a record $300 billion. This was the highest number of IPOs since 2000 and the most money raised since 2007. The strong IPO market was driven by a number of factors, including low-interest rates, strong investor demand, and a number of high-profile tech companies going public.

However, the IPO market cooled off significantly in 2022. Only 248 companies went public in the first half of the year, raising $57 billion. This was the lowest number of IPOs since 2016 and the least money raised since 2015. The slowdown in the IPO market was due to a number of factors, including rising interest rates, concerns about a recession, and the ongoing war in Ukraine.

Despite the slowdown in 2022, there are signs that the IPO market is starting to recover in 2023. In the first quarter of the year, 108 companies went public, raising $21 billion. This was the highest number of IPOs since the fourth quarter of 2021.

There are a number of factors that could contribute to a stronger IPO market in 2023. First, interest rates are expected to remain low, which will make it more attractive for companies to go public. Second, investor demand is still strong, especially for high-growth tech companies. Third, a number of high-profile tech companies are expected to go public in 2023, which could drive up demand for IPOs.

Forecast for IPOs in 2023

Based on the factors mentioned above, I forecast that the IPO market in the United States will be stronger in 2023 than it was in 2022. I expect to see around 400 companies go public in the United States in 2023, raising around $100 billion.

The strongest sectors for IPOs in 2023 are likely to be technology, healthcare, and financial services. These sectors are all expected to continue to grow in the coming years, which will make them attractive to investors.

SPACs vs. IPOs: A Comparison

In recent years, there has been a growing trend of companies going public through special purpose acquisition companies (SPACs). SPACs are shell companies that raise money from investors with the intention of merging with a private company and taking it public.

SPACs have a number of advantages over traditional IPOs. First, they can be completed more quickly and easily than traditional IPOs. Second, SPACs can offer investors more liquidity than traditional IPOs. Third, SPACs can be used to take public companies that are not yet profitable.

However, SPACs also have some disadvantages. First, they can be more expensive for companies than traditional IPOs. Second, SPACs can be more risky for investors, as they are not always clear about what company they will merge with.

Overall, SPACs are a viable alternative to traditional IPOs for companies that want to go public. However, investors should carefully consider the risks and benefits of SPACs before investing in them.

Conclusion

The IPO market in the United States is expected to be stronger in 2023 than it was in 2022. A number of factors, including low-interest rates, strong investor demand, and a number of high-profile tech companies going public, could contribute to this growth. SPACs are also a viable alternative to traditional IPOs for companies that want to go public. Investors should carefully consider the risks and benefits of SPACs before investing in them.