funding round

IPOs in the U.S. and Europe aren’t doing so well, having fallen 90% in value so far this year, Financial Times (FT) reports.

That comes amid several destabilizing factors – the Ukraine war and surging inflation are two of the main ones.

Businesses have had to shelve their plans to go public, with only 157 companies raising $17.9 billion in total in the first five months of the year. That’s down from 628 companies raising $192 billion in the same period in 2021 — which had the busiest period ever for listings in its first three quarters, with companies rushing to go public after the pandemic’s most dangerous parts seemed to be over at the time.

This isn’t only a U.S. and European problem: the value of IPOs has fallen 71% around the world, too.

The figures seem to suggest that the slump in the first quarter hasn’t eased. The volumes are supposed to be down quite a bit year-on-year at the end of the second quarter, later this month.

“A lot of people were raring to go and then a confluence of factors hit them all at once,” said Martin Glass, a partner at law firm Jenner & Block who advises companies on IPOs.

He added that after things stabilize, there is likely to be more activity, even if it doesn’t hit the same levels as last year.

The FinTech IPO index is reportedly getting some steam back, and although the group is down by around 35% year-over-year, there has been a 5.2% gain in the last week.

PYMNTS wrote that, in a seeming trend, the firms bringing buyers and sellers together and allowing price discovery have gotten more investor favor. That might be because, despite volatility in the stocks, there’s been a pivot toward more connectivity that is still going strong.

Photo by Markus Winkler on Unsplash

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