2021 was quite a year for initial public offers (IPOs) in the United States, which was largely influenced by the significant rise in the number of special purpose acquisition companies (SPACs) who went public. In 2021, there were ***** initial public offerings (IPOs) in the United States. In 2022 and 2023, however, the number of IPOs dropped to *** and *** respectively. 2024 saw a rise in the number of IPOs, reaching *** by the end of the year. What does it mean to go public? The management of a private company has a lot of control over its operation, but raising funds from investors is more difficult. To access funds from regular investors, that is the general public, firms go public by offering stock shares at a certain price. As a result, these firms often have more capital to work with. An IPO can, and often does, raise ******** of dollars for a firm. However, publicly traded companies also face increased regulation and disclosure requirements. Staying private Some firms delay going public for a longer time, in spite of their increasing value. If their valuation goes above *********** U.S. dollars, these firms are called unicorns, and the highest valued unicorns are mostly based in the U.S. and China. Some firms, such as SpaceX, are still heavily investing in research and development projects, which shareholders often dislike due to low short-run dividends. At the moment, most unicorns are found in the technology sector, which is also the leading sector for IPOs in the United States. This indicates that investors consider this to be the industry most likely to see growth, and thus most worth investing in when companies go public.

Not all IPOs result in long-term gains for the respective company; however, the average year-end gains for all companies that went public in the United States have been mostly positive each year over the past decade. In 2023, however, the average returns amounted to a negative 56 percent in the first year after their IPO.

2020 and 2021 were a record year for SPAC IPO filings, even though they had been steadily growing in popularity over the last decade. In 2021, SPACs had raised capital in *** IPOs in that year alone. A special purpose acquisition company (SPAC) is a company with no business operations which is set up for the sole purpose of raising capital through an initial public offering with the goal of buying an existing company. The U.S. ranked second globally in terms of traditional IPO numbers, with the highest number of traditional IPOs occurring in mainland China. In comparison, there were ** SPAC IPOs in 2023, and ** in 2024. How have SPAC IPOs historically performed in the U.S.? From 2003 to 2019, the funds raised by SPAC IPOs remained somewhat consistent, with the value of funds never exceeding ** billion U.S. dollars except in 2003 and 2019. SPAC IPOs raised the largest amount of funds between January and December 2021, with the value of funds raised surpassing *** billion U.S. dollars. In the previous year, SPAC IPOs raised more funds than all preceding years combined. The U.S. vs Europe While SPAC IPOs in the U.S. have been slowly increasing over the past six years, numbers have remained significantly lower in Europe. Europe has still not seen annual SPAC IPO numbers exceed nine per year, while those in the U.S. have increased more each year, reaching a significant high-point in 2020 that is expected to be further surpassed by the end of 2021. During the first three months of 2021, less than **** percent of SPAC IPOs completed globally came from Europe.

In the fiscal year of 2023, the total value of all initial public offerings in the Gulf Cooperation Council was 10.6 billion U.S. dollars. This was a significant decreased compared to the 23 billion U.S. dollars in 2022. Finance industry in GCC Low interest rates and low oil prices stimulated a frenzy of debt activity in 2020 and Q1 2021, including multiple government issuances. With oil prices steadily recovering, we may see a short-term adjustment in national debt activity. On the Dubai Financial Market (DFM), the UAE's first initial public offering (IPO) in three years emerged. Al Mal Capital REIT was the exchange's first real estate investment fund offering, generating 95 million U.S. dollars. During the year, the UAE introduced several reforms relating to corporate ownership and listing standards, all of which are expected to boost IPOs on local stock exchanges. The value of domestic initial public offerings in the United Arab Emirates was expected to reach 0.5 billion U.S. dollars by 2022. The largest number of IPOs in the GCC region in 2019 was in the consumer goods industry. Islamic fintech The Islamic fintech industry is anticipated to develop rapidly. Islamic fintech is characterized as a financial technology segment that adheres to Sharia law's rules, which include prohibitions on earning from debt, paying interest, and investing in firms associated to alcohol, tobacco, and gambling, among other restraints. In 2020, Saudi Arabia had the largest fintech market, at over 18 billion U.S. dollars.

More initial public offerings (IPOs) occurred in India in 2024 than any other region or country worldwide, with ***. The United States followed, with *** IPOs in that year. The ASEAN countries rounded up the top three, with a combined number of IPOs amounting to ***. Why make an IPO? Private companies have a lot of control over their companies, but their funding sources are limited. While some of these companies have achieved valuations over one billion U.S. dollars, called unicorns, most have trouble finding the cash to grow their business. To open themselves to public investors, they make an initial offering of shares of stock. The largest IPOs are worth billions of U.S. dollars. Timing is everything The timing of an IPO can have a huge impact on its performance, which is as important for investors as it is for the companies themselves. As such, many investors watch to see who is next in line to make an IPO. The right play at the wrong time is the wrong play and might result in a negative return. While underwriters and consultants can mitigate some risk factors, markets are inherently unpredictable. As such, an IPO always carries risk, with hopes of the reward of an infusion of capital.

At nearly ** billion U.S. dollars, the 2014 initial public offering (IPO) of Alibaba Group Holding Limited remains the largest IPO in the United States ever. Trailing by almost **** billion U.S. dollars, Visa takes second place, followed by ENEL SpA, an energy company based in Italy. What is an IPO? An IPO is when a private company offers shares to the public for the first time through a stock exchange. Companies do this to raise money, as seen with Alibaba. However, public companies are subject to more scrutiny, such as publishing quarterly reports for investors. Also, not all IPOs are profitable. A bad IPO can result in significant losses. Companies that could go public Unicorns are private companies valued over a billion U.S. dollars. Any of these could go public, raising significant funds. However, most IPOs are valued in the ********, not ********. The median deal size of these offerings in the United States tends to be a little more than *** million U.S. dollars. Investors keep a watch for the next IPO, since a strong offering means high returns for those who buy the stock early.

In 2024, the total value of traditional IPOs in the United States increased slightly but remained one of the lowest figures since 2000, amounting to **** billion U.S. dollars. The gross proceeds for 2022, on the other hand, amounted to *** billion U.S. dollars, the lowest figure ever recorded during this period. However, SPAC IPOs proceeds amounted to *** billion U.S. dollars in 2024.

In 2024, the value of initial public offering funds raised at the Hong Kong Stock Exchange amounted to almost ** billion Hong Kong dollars, which was a significant increase of almost ** percent to the previous year. The value of IPO funds increased despite the global outbreak of COVID-19. In the same year, the largest IPO was China Tourism Group Duty Free Corporation which raised over ** billion Hong Kong dollars.

Initial IPO returns in the United States fluctuated between 2005 and 2023. Throughout the period considered, 2020 was the best year for first-day gains, amounting to ** percent. In 2023, the average first-day gain after an IPO in the U.S. was **** percent, as IPOs maintained their offering prices on their first day of trading.

The median size of initial public offerings (IPOs) in the United States increased significantly in 2020. However, in 2023, the median IPO size reached 10 million U.S. dollars, a dramatic decrease compared to the previous years. This figure gives an idea of how willing speculators in the United States are to invest in a company going public, which is the process of being listed on a stock exchange for the first time. Who goes public? Most IPOs come from relatively new firms that have grown quickly. For example, the Alibaba Group Holding IPO was the largest IPO in the United States. This firm is a relatively new tech company overseen by Jack Ma, who had already generated billions in private funding before going public. However, Visa’s 2008 IPO occurred 50 years after the company’s founding, when it already had millions of credit cards in circulation. Still, the company had generated enough enthusiasm for its IPO to raise a record amount of money. Over and under the median The megadeals such as the Alibaba IPO are rare, though there is an increasing number of startup companies valued one billion U.S. dollars and over. While these raise the median value, the worst IPOs lower it. A successful IPO can lead to huge gains in valuation, the IPOs with the lowest return lose over half the company’s value.

The total number of initial public offerings (IPOs) in Europe fluctuated significantly between 2009 and 2024. The number of IPOs reached a total of ** in 2024, the same as during the previous year. The largest number of initial public offerings (IPOs) in Europe was found in 2011, when the number of recorded IPOs reached a total of ***.

Between 2022 and 2023, the number of initial public offerings (IPOs) globally decreased by eight percent, which was five times less than the decline in the previous year. The Americas and EMEIA, which experienced the steepest declines in 2022, saw increases of 15 percent and seven percent, respectively, in 2023. The year-on year change in IPO proceeds in each region exceeded the decrease in the number of IPOs, except for the Americas.

Between 2011 and 2019, the value of initial public offerings (IPOs) on the New York Stock Exchange fluctuated. After 2019, IPO deals value increased considerably. In 2020, the size of IPO deals increased threefold compared to the previous year. In 2021, IPOs deals on the NYSE reached a total value of 109.2 billion U.S. dollars.

From 2010 to 2019, the number of initial public offerings (IPOs) on the Nasdaq Stock Exchange fluctuated. After that period, sharp increases were recorded for the number of deals. The largest jump in number of IPOs was in 2021 when deal volume peaked at 753. In the following years, however, the number of IPOs decreased and amounted to 171 in 2024.

The initial public offering (IPO) of Saudi Aramco, the Saudi Arabian multinational petroleum and natural gas company, on the Tadawul in December 2019, was the largest public offering globally ever as of December 2024. The IPO of Saudi Aramco raised approximately **** billion U.S. dollars. Why do companies opt for IPOs? An initial public offering (IPO), also known as ‘going public’, is the company’s first stock sale to the public. IPO happens when an initially private company decides to open up to the stock market, taking the first step to become a publicly traded enterprise. Shares are traded in the open market after the initial sales, and any public investor can take part on the trade. In the United States alone, *** companies made their public-market debut in 2023. IPOs are made by different companies for a number of reasons. Smaller sized companies may seek an IPO for access to capital and cheaper credit for further expansion. Other companies that may already be of considerable size, however, may use an initial public offering to other ends. Opening up to the stock market can also facilitate merger and acquisitions, considering stocks can be part of a future deal. Chinese companies feature twice Two Chinese companies featured in the list as of 2024. Alibaba had the second largest after Saudi Aramco, with the Industrial and Commercial Bank of China (ICBC) in tenth place. Alibaba is listed on the New York Stock Exchange (as well as the Hong Kong Exchange), making the company’s IPO also the largest one in the U.S. to date. ICBC is listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange.

On September 13, 2023, Arm Holdings plc raised 5.2 billion U.S. dollars on its public debut on the Nasdaq Stock Market, making it the largest initial public offering (IPO) in the United States in 2023. Only three of the ten largest IPOs in the U.S. that year each raised over one billion U.S. dollars in capital.

Why do companies go public?

Private companies have limited access to capital and mainly use traditional sources to finance their expenditures. While such firms have more freedom to operate without reporting to investors, this also blocks the companies from raising access directly from the public. The value raised by IPOs can be significant. In hopes of gaining access to this capital, the number of IPOs in the United States generally exceeds 100 firms each year.

Risks of an IPO

IPO is a long and costly process. It necessitates cooperation with investment advisory firms to ensure that all requirements are met and that the process is optimally planned. A public company is subject to governmental and public scrutiny – any negative information, such as rumors about insider trading, can result in falling stock prices. Also, the time when going public is crucial. Even a prospering company can have a very low return in times of recession.

**** was the underwriter of the initial public offering (IPO) of ************ in April 2019. At almost ** billion U.S. dollars, this was the largest all-time IPO globally as of October 2021. This was followed by *******'s 2014 IPO worth just over ** billion U.S. dollars, underwritten by *************. Who were the leading underwriters in the U.S.? Underwriting is the process through which an investment bank (the underwriter) acts as a broker between the issuing company and the investing public to help the issuing company sell its initial set of shares. As of October 2021, the underwriters of the largest IPOs in the United States were ******************************************* – the combined value of their underwritten IPOs reaching almost ** billion U.S. dollars. When taking a company public, investment banks charge underwriting fees, which are the largest single direct cost associated with an IPO. In 2020, the underwriting fees for deals in the U.S. which were valued between *** million and * billion U.S. dollars, amounted to more than * percent of the gross proceeds from the offering. What does the global IPO market look like? Going public is typically a way for private companies to raise capital for expansion, although venture capitalists can also use IPOs as exit strategies. In 2020, ************** had the largest number of traditional IPOs than any other region worldwide. This was followed by the *************, which saw a significant increase in the number of IPOs that year.

**************** is a British semiconductor and software design company based in Cambridge, England, which had the largest initial public offering (IPO) worldwide in 2023, worth over **** billion U.S. dollars. The American consumer health company *********** was the protagonist of the second-largest global IPO of the year, a deal worth *** billion U.S. dollars. China had both a total of ***** companies in the list of top ten global IPOs in 2023.

2021 was an exceptional year for IPO deals worldwide, with proceeds exceeding 450 billion U.S. dollars. In 2022 and 2023, however, the value of IPO proceeds decreased significantly compared to 2020 and 2021.

In 2021, SPAC IPOs in the United States raised almost twice as much as they raised in the previous year, reaching approximately *** billion U.S. dollars. In 2022, proceeds of SPAC IPOs surpassed 2017 and 2018 levels, however remained significantly lower than the last two years. A special purpose acquisition company (SPAC) is a company with no business operations which is set up for the sole purpose of raising capital through an initial public offering with the goal of buying an existing company. 2020 was a significant year for SPACs with a dramatic increase in the number of IPOs.