IPO value drops 90% in US and Europe amid tech downturn

ipo value

The value of initial public offerings (IPOs) in the US and Europe has plummeted by 90% this year, according to data from Dealogic.

The data, first reported by the Financial Times, shows that in the first five months of this year 157 companies raised a combined $17.9bn (£14.25bn).

By contrast, 628 companies raised a total of $192bn (£152.9bn) during public listings in the same period last year.

The war in Ukraine and worsening macroeconomic conditions have forced businesses to reassess plans for public flotations following a record-breaking global IPO market in 2021. The downturn has also wiped off billions of dollars in the value of tech and growth stocks.

That trend has come to an abrupt halt, with the global value of IPOs dropping by 71% so far this year, the Dealogic data shows.

Separate data published by EY recently revealed that global IPO value fell by 51% over the first three months of 2022. This shows that IPO value creation has fallen in step with the worsening economic downturn.

Data published in April showed that the amount of money raised through IPOs via the London Stock Exchange in the first three months of the year fell from £5.6bn in 2021 to £397m in 2022.

The decline follows a record year for tech IPOs in the UK in which firms raised £6.6bn. Among the 37 tech firms to list were fintech Wise, mobility firm Deliveroo and cybersecurity company Darktrace.

This year the appetite for UK tech IPOs has been more muted, with companies instead looking to 2023 for public listing plans.

London-based fintech giant Revolut last week posted a job advert for a head of investor relations in a sign it was gearing up for an IPO, but told UKTN the flotation would “probably” not take place this year.

In February, UK challenger bank Atom said it was “likely” to IPO next year instead of this year.

It comes as the UK’s Financial Conduct Authority (FCA) is looking to encourage more companies to choose London to conduct their IPO.