IPO Insights 4Q 2024
Perspectives on the quarter’s market trends
Taking a company public can boost its profile and provide much needed capital resources. But ensuring readiness for the capital markets requires a keen understanding of the current IPO landscape—significant exits; sectors on the rise; trends in deal prices, sizes, returns; and more.
IPO Insights delivers the latest information and analysis on IPO activity and performance. Prepared by professionals from the KPMG Capital Markets Readiness and KPMG Private Enterprise practices, this quarterly report is designed to help private business leaders prepare their companies to join the capital markets.
Cautious optimism grips IPO markets
As investors turned the page to 2025, it was hard not to notice the optimism. IPO markets had performed well in 2024, with volumes up 38 percent and values up more than 50 percent year-over-year. It wasn’t even close to the exuberance of 2021. But it was certainly a notable improvement over last year.
While the final quarter of 2024 was largely dominated by smaller deals, there were $500 million-plus deals brought to market in the quarter: PE-backed StandardAero (an aviation maintenance, repair and overhaul (MRO) provider) raised $1.4 billion and ServiceTitan (a cloud-based business services provider) raised $625 million.
The November 2024 election in the U.S. brought some initial certainty to the markets, and some anticipate the new administration will loosen federal regulations, reduce corporate taxes and encourage domestic industry which, in turn, would be expected to fuel IPO markets. However, there has been a shift toward cautious optimism as economists believe that tariffs and other policies could be inflationary and potentially lead to the Fed raising rates.
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Highlights of 4Q’24
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No. of IPOs(a)(b) and gross proceeds (US$B)
The below data includes 15 direct listings closed during 2020-2024; 1 direct listing was reported in 3Q24
The signs are all pointing towards an active back-half of Q1 2025 and increased activity through the rest of the year. Those who have already filed with the SEC will be thinking carefully about timing. Those who have not will now be looking to file as soon as possible, likely by the middle of the year – suggesting a strong pipeline into 2026.
Conor Moore
Global and Americas Head, KPMG Private Enterprise
Smaller deals shore up the returns
Industrial manufacturing (IM) dominated the tables this quarter with 20 of the 55 offerings. IM also saw a significant increase in proceeds versus the same quarter last year. However, the IM sector faltered somewhat through the quarter, delivering a -15 percent average return by year end.
Healthcare and life sciences performed better, bringing nine offers to market and raising a cumulative $923 million. Once again, the sector’s largest deal (Septerna, which raised $288 million) faltered, delivering a -2.6 return on the quarter. But other deals in the sector held up well, providing an average return of 13.7 percent.
The technology, media and telecommunications (TMT) sector also saw volume increases, more than doubling the number of offers versus the same quarter last year and raising $1.3 billion in proceeds. TMT saw two big deals, led by ServiceTitan raising $625 million and Ingram Micro Holding Corporation (an IT products and services company) which raised $409 million. Overall, returns were up 4.4 percent.
The fourth quarter of 2024 saw a significant uptick in the number of private companies looking to become IPO-ready. With markets reopening and investor confidence up, private owners want to be ready to move when the time is right.
Shari Mager
Partner and U.S. National Leader, Capital Markets Readiness, KPMG LLP
US traditional IPO performance in 4Q24 by sector
PE and VC eye out the market
VC exits remained fairly steady in the fourth quarter, both in terms of volume and type. Proceeds raised bounced back somewhat after a lackluster third quarter. Expectations are high for strong VC activity in 2025 with a significant number of unicorns (companies with valuations over $1 billion) currently waiting in the stable.
Private Equity, on the other hand, enjoyed a strong quarter, raising some $136 billion from 318 exits. Public listings played only a small role, providing just 2 percent of the exits and 2 percent of the proceeds raised for PE in the quarter. However, 2024 saw a 5.5 percentage point increase year-over-year in PE-backed IPO volume, suggesting more activity may be likely in the first half of 2025.
US VC exit volume by type (Percentage share)
US PE exit volume by type (Percentage share)
Future trends
Are SPACs back?
As the IPO markets shut at the end of 2021, SPAC formations tumbled. But they didn’t disappear. And now there are signs that they are making a comeback. The number of SPAC formations rose more than 80 percent in 2024 versus 2023, with proceeds up 148 percent to $8.6 billion. In the last quarter alone, 23 new SPACs were listed, netting $3.4 billion.
With 31 SPAC IPOs already in the pipeline and managers now taking a more rigorous approach to deal structuring and risk assessment, the outlook for future SPAC formations is strong. However, much will depend on the track record of recent de-SPACs, the regulatory environment and changes to directors and officers (D&O) insurance and legal frameworks.
Tech and healthcare back in demand
When investor confidence is strong, tech and healthcare stocks are usually in high demand. It is a good sign, therefore, that the sectors saw strong growth in IPO activity in 2024. Expectations are now high for continued activity into 2025.
For tech, expect to see significant activity around companies with strong AI offerings, as well as those providing cloud computing and cybersecurity solutions. On the healthcare side, investments in biotech and medtech, coupled with an expected loosening of regulatory requirements and new clinical advances, should drive new market activity.
With attractive valuations and the promise of ongoing innovation, these sectors offer strong potential for growth in 2025.
Outlook for 2025
While some uncertainties remain – and others become more challenging – we expect to see IPO activity be stronger in 2025 than it was in 2024, driven by long-awaited unicorns, supportive economic policies and renewed investor interest. Alongside tech and healthcare, we expect to see increased activity around fintech on the back of increased interest in digital payments and crypto, as well as the consumer sector.
Although investor confidence is strong in anticipation of a more business-friendly administration and stronger economic conditions, it is also tempered by challenges created by certain US administration policies. We believe that volatility and market uncertainty may limit the IPO window in 2025.
We still believe that 2025 will see activity pick up through the year. It won’t be a return to 2021. But it will look something like normal.
How KPMG can help
Understanding the key trends and investor expectations is critical to preparing for an IPO. Investment narratives matter. They cut through the deluge of data and analysis, and help companies sift real windows of opportunity from market noise. And the most compelling deal stories come from insights about a company’s unique mix of valuation drivers. Sector. Markets. Customers. Portfolio mix. Capital structure.
At KPMG, our professionals offer a range of services specifically designed to help privately owned companies—venture-backed or otherwise—navigate each stage of the IPO journey. We help entrepreneurial ventures simplify the complex challenges of going public, while helping ensure they meet their diverse regulatory, compliance, and reporting requirements.
Working with KPMG, you gain access to trusted advisers who share your entrepreneurial mindset. And we can help you understand and improve the factors that drive maximum deal value for your offering.
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