From Slowdown to Takeoff: The IPO Buzz of 2024 and What's Next for 2025

In my January 2024 blog post, I highlighted the IPO market's turbulent journey through 2023, marked by a sharp slowdown and cautious optimism for a 2024 revival. Now, as the year draws to a close, we stand at a pivotal moment to reflect on how the market unfolded - its unexpected twists, standout listings, and the companies that made their public debut. More importantly, it’s the perfect time to look ahead to 2025, a year poised to deliver game-changing IPOs and new opportunities in the world of public markets. Let’s dive into what shaped 2024 and what could redefine the landscape in the coming year.

2024 IPO Market

The 2024 IPO market showcased a tale of two halves, with some regions flourishing while others faced significant hurdles. Global IPO proceeds experienced a slight decline, but this masked a more dynamic picture of regional and sector-specific activity. In the United States, a resurgence in IPOs highlighted growing economic stability and strong investor appetite. Companies from diverse sectors, including technology, life sciences, and consumer markets, capitalized on the favorable conditions, with several billion-dollar IPOs making headlines. The US also saw increased interest in companies leveraging AI and technology as drivers of long-term growth, setting the stage for a vibrant IPO market in the years to come. One of the potential IPO candidates in my January 2024 blogpost, Reddit, went public just two months later. As things stand today, the IPO of the platform and social network seems to have been successful, with the stock being up 381% since its IPO.

Europe demonstrated a strong rebound, doubling its IPO proceeds compared to the previous year. Large offerings across various industries, coupled with improved investor sentiment, reinforced the region’s position as a key player in the global IPO landscape. Meanwhile, the Middle East continued to establish itself as a robust market for equity listings, with significant activity in countries like the UAE and Oman, reflecting the growing ambition of local exchanges to attract global investors.

India emerged as a standout performer in the Asia-Pacific region, hosting its largest-ever IPO and driving a surge in proceeds. The country’s strong consumer and industrial sectors underscored its rising influence in the global capital markets. However, the broader Asia-Pacific region faced challenges, particularly in China and Hong Kong, where IPO activity slowed significantly. This decline was attributed to macroeconomic pressures, although late-year stimulus measures hinted at a potential rebound.

While many regions thrived, the UK market continued to struggle, reflecting deeper structural issues. IPO activity remained muted, with few major offerings and continued delistings. London, once a premier destination for IPOs, faced stiff competition from other financial centers, compounded by low valuations and weak liquidity. Even recent regulatory reforms aimed at simplifying listing rules have yet to restore the market’s competitiveness. Investors in the UK remained cautious, and many high-profile companies opted for listings in more dynamic markets like the US or Europe. This highlights a growing challenge for the UK to revitalize its 300-year-old bourse and reclaim its position as a leading global financial hub. The UK market has however seen a somewhat successful IPO: Raspberry Pi, the designer and manufacturer of affordable, credit card-sized computers, is up 71% since its IPO.

Sector-wise, Consumer Discretionary and Consumer Staples led the IPO market in 2024, benefiting from stabilizing inflation and interest rates. These sectors outpaced technology, which, despite high valuations in private markets, saw reduced IPO activity as many tech firms opted to stay private longer. The diversity of sectors and geographical spread of major IPOs signaled a shift in priorities among investors, who increasingly focused on the fundamentals and quality of issuers rather than following sector trends. Below given is a list of the Top 10 global IPO's in 2024.

Issuer name	Issuer country	Sector	Money raised
Lineage	United States	Real Estate / REIT	$4.4bn
Hyundai Motor India	India	Consumer Discretionary	$3.3bn
Puig Brands	Spain	Consumer Staples	$2.8bn
Tokyo Metro	Japan	Industrials	$2.3bn
Galderma Group	Switzerland	Consumer Staples	$2.2bn
CVC Capital Partners	Jersey	Financials	$2.2bn
Talabat Holding	United Arab Emirates	Consumer Discretionary	$2.0bn
OQ Exploration and Production	Oman	Energy	$2.0bn
Lulu Retail Holdings	United Arab Emirates	Consumer Staples	$1.7bn
Zabka Group	Luxembourg	Consumer Staples	$1.6bn

 

What to expect in 2025?

Global efforts to simplify listing regulations provided a tailwind for public markets, particularly in Europe and the UK, where exchanges aimed to regain competitiveness. As economic conditions stabilized and investor confidence grew, the groundwork was laid for a more dynamic IPO market in 2025. With regions like the US, Europe, and the Middle East gaining momentum and a pipeline of promising companies waiting for the right conditions, the global IPO market remains poised for a potential rebound.

Revolut Revolut, a prominent UK-based fintech company, is reportedly preparing for an initial public offering anticipated in 2025. Following a secondary share sale in August 2024, the company achieved a valuation of $45 billion, backed by institutional investors such as Tiger Global Management, Coatue, and D1 Capital Partners. Known for its innovative digital banking platform and global currency exchange services, Revolut has grown into a leader in the fintech space. CEO Nik Storonsky has expressed a preference for listing in the United States, citing greater liquidity and more favorable regulatory conditions compared to the UK. This preference has spurred discussions with the UK government, which hopes to encourage a London Stock Exchange listing to strengthen the country's capital markets.

Stripe Stripe, a leading global payments processing company, is anticipated to pursue an initial public offering in 2025, with a projected valuation of approximately $65 billion. Founded in 2010 by brothers Patrick and John Collison, Stripe has established itself as a cornerstone of the fintech industry, offering a comprehensive suite of payment solutions for businesses worldwide. Its platform supports everything from online payment processing to subscription management, enabling seamless digital transactions. Analysts suggest that an IPO would provide Stripe with significant capital to expand its global operations and further develop its product offerings. However, potential investors should remain cautious about the competitive payments landscape and market volatility, which could affect the company’s post-IPO performance.

Databricks Databricks, a leading data and AI company, is preparing for an initial public offering expected in late 2024 or early 2025, with a projected valuation of $43 billion. Known for its platform that unifies data, analytics, and AI, Databricks helps customers derive insights from enterprise data and develop generative AI solutions. The company has forged key partnerships with AWS, Google Cloud, and Microsoft Azure, bolstering its technological capabilities and market presence. As a pioneer in data-driven innovation, Databricks has captured the attention of investors eager to capitalise on its growth. However, its IPO comes amid a competitive and rapidly evolving tech landscape, which may pose challenges for sustaining its market momentum post-listing.

Klarna Klarna, a Swedish fintech company renowned for its "buy now, pay later" services, is gearing up for an initial public offering in the United States, aiming for a New York listing in the first half of 2025. The company has enlisted Goldman Sachs, JPMorgan Chase, and Morgan Stanley to lead the share sale. Analysts have estimated Klarna's valuation at $14.6 billion, signaling a significant rebound from its $6.7 billion valuation in 2022, although still far from its $45.6 billion peak. Klarna continues to solidify its leadership in the fintech space, serving millions of customers with innovative payment solutions. The upcoming IPO highlights the company’s ambition to expand its market reach and financial flexibility while navigating competitive pressures and evolving consumer trends.

 

Sources:

1. Global IPO Watch 2024, PWC (https://www.pwc.co.uk/services/audit/insights/global-ipo-watch.html)
2. Shrinking UK Stock Market Sinks Below Oman in Global IPO Ranking, Bloomberg