Nasdaq | Increased dealmaking signals continued IPO market recovery

Last year, we saw continued improvement in the initial public offering (IPO) market, explains Nasdaq Chief Economist Phil Mackintosh. There were more IPOs, more special purpose acquisition companies (SPACs), and IPOs raised more money than in both 2022 and 2023. 

A number of factors aligned. Firstly, with inflation falling back to around 2%, interest rates started to fall. In addition, volatility was lower than 2022 and 2023. That helped markets rally to all-time highs on higher valuations (Chart 1, purple line, CAPE increased to 2021 levels), which, in turn, helps improve overall positive investor sentiment. These are all factors our IPO Pulse shows are important for a stronger IPO market.

But looking at the data, supplied in part by Cordell Eminent Scholar Jay Ritter, we see a consistent improvement in not only the number of IPOs but also their returns as we head into 2025.

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