Firms are going public once again

For investment bankers, the Covid years of 2020 and 2021 were a golden era. Those years saw stellar deal volume for initial public offerings (IPOs) thanks to ample liquidity and low interest rates, while work from home allowed IPO roadshows to multiply. But the market for IPOs took a beating in 2022-2023 as the Federal Reserve cranked up rates to squelch inflation.

The situation began to reverse in 2024, and 2025 has been better still. No fewer than 194 IPOs have priced this year, a 49% increase from this time last year (Renaissance Capital). This already puts us above the long-run average of 165 for an entire year. Such deals are an indicator of “animal spirits.”

These offerings have brought in proceeds of over $36 billion so far, up 28% from this point last year. And it’s been a broad market, with nearly every sector participating.

Will recent strength continue?

The trend is showing no signs of slowing down. The third quarter of 2025 was the most active quarter in the IPO market since 2021. Tech and related sectors led the way, thanks to interest in AI and other advances. Health Care, Financial Services and Energy made notable contributions as well.

Since then – and particularly during the federal government shutdown – we saw that trend begin to reverse. With the shutdown finally behind us, the question now is whether IPOs will limp on or reaccelerate through to the end of the year?

We think several tailwinds could recapture the earlier momentum. First, performance in the aftermarket—i.e., after the IPO itself—has largely been solid. Second, corporate earnings have been reassuring. Third, the US macro environment is favorable, with the Fed cutting rates and ending quantitative tightening. Lastly, the IPO market stands to benefit from the Trump administration’s desire to reform and reduce regulations.

Taken together, it appears likely that investors will continue to see a robust dealmaking environment, including a thriving market for IPOs.