The IPO market has been dreadfully slow. In fact, in 2022, there were only 68 IPOs. This is the second lowest total since 2000. The lowest of course was 62 IPOs in 2008 as the Global Financial Crisis was just kicking into high gear. The most interesting difference is that ahead of the GFC there was not any particularly meaningful spike in IPOs and there certainly was nowhere near the dry powder there is today in private markets. In stark contrast, 2021 was the biggest year for IPOs ever with more than 1000 hitting public markets. These numbers are global numbers, but we care about them because the IPO is generally the place where Private Equity and Venture funds get the highest valuation for their exits.
The numbers in 2021 were hot. Frankly, a number of those companies probably never belonged in public portfolios, and we wonder how sustainable many of them are given the high cost of public registration. But 2021 saw the first uptick in public companies since 2014 and for a second there, things got pretty exciting. But with a disastrous 2022, we were back on track, watching the broader trend since 1996 where the number of public companies in the US has been cut in half. Given the long-term trend, it’s tough to get too excited, but it is also encouraging, that while the total number of IPOs this year is still only 44, the dollar amount of those transactions is nearly the same as it was for all of 2022.
The other sign that we take from this uptick is that companies are starting to come to grips with the reality that 2021 isn’t happening again anytime soon. Whether we’re talking about real estate, private equity or public companies, too few have come to grips with the new reality. Well, at least they were. Restaurant chain CAVA had a tremendous debut last week that could set that progress back a bit. But more importantly, if we find new interest in raising money through public markets, we hope we can see it in other markets before too long.