As we step into 2025, understanding IPO trends is crucial if you're preparing for an initial public offering in the next 12-18 months. 2025 promises a dynamic shift in the IPO landscape, influenced by a range of economic, technological, and regulatory factors. This overview will delve into the latest IPO market trends, offering insights and strategic guidance for legal professionals navigating this complex and high-stakes process.

Increasing activity in the technology and healthcare sectors

The technology and healthcare sectors continue to dominate IPO activity, driven by rapid innovation and high investor interest. In the second half of 2024, these industries are expected to see a significant number of new listings. BrightSpring Health Services, Perceptive Capital Solutions Corp., Revolut, and BMC Software are examples, with companies leveraging advancements in AI, biotech, and digital health to attract substantial investments.

IPOs are up despite the economic slowdown

 on the US stock market, compared with a total of 

 in the whole of 2023. This suggests that IPO filings in 2024 are set to surpass 2023 by some margin, partly due to the recovery from the economic slowdown and the surge in 

 opportunities with companies like Klarna, Discord, and Databricks coming to the market in the second half of 2024.

Over the last two years, Special Purpose Acquisition Companies (SPACs) have proven popular and positive for many investors. While most experts agree to exercise caution with SPACs, they certainly favor short-term speculative trades. For a fast entrance into the market and a wider spectrum of companies that can go public, SPACs are still exciting; for example, 

SPACs continue to be a popular vehicle for companies going public. The flexibility and speed of SPAC mergers offer an attractive alternative to traditional IPOs, especially for high-growth startups looking to scale quickly.

Cross-border IPOs are gaining traction, with companies seeking listings in foreign markets to tap into diverse investor bases and achieve higher valuations. In fact, in Q1 of 2024, the two largest American IPOs, Lineage Inc. and Tempus AI Inc., were cross-border. In 2023, there were 85 cross-border public offerings. With the highest number (30) coming from China. This trend underscores the globalization of capital markets and the strategic decisions companies make to optimize their IPO outcomes.

A slowdown in global inflation meant that in 2024, global economic growth held steady at 

. The overall health of the global economy plays a pivotal role in the IPO market. Economic growth, consumer spending, and business investment levels directly impact company earnings and investor confidence, influencing IPO activities. With a stabilization in global economics, this is likely to give investors the confidence to invest in IPOs in the H2 of 2024.

Interest rates set by central banks significantly affect the IPO market. Interest rates have slowly been increasing over the last few years due to the lasting impact of COVID-19, global inflation, wars around the world, changing governments, and more. This has dampened IPO activity as higher interest rates mean borrowing costs rise, so investors look for safer, yield-generating investments.

 due to the uncertain return on investment they present to potential investors. Companies prefer to launch IPOs in stable market conditions where predictions about future performance are more reliable. Conversely, periods of low volatility and rising stock markets typically see an increase in IPO activity.

The regulatory environment can either facilitate or hinder IPO processes. Stringent regulations and compliance requirements can increase the cost and complexity of going public, potentially discouraging some companies. On the other hand, regulatory easing and incentives for public listings can boost IPO numbers. Changes in securities law, corporate governance standards, and listing requirements are all regulatory factors that need to be considered.

Political stability and policies that encourage business growth and foreign investment can positively influence IPO market trends. Conversely, political unrest or protectionist policies can have the opposite effect, causing uncertainty that may deter companies from going public.

The mood and behavior of investors, driven by various factors, including those listed above, play a critical role. Positive investor sentiment can drive high demand for new IPOs, while negative sentiment can lead to a tepid response, affecting the pricing and success of new listings.

Technological advancements have significantly streamlined the IPO process. Innovations in financial technology, such as blockchain, have simplified and secured transactions, making IPOs more appealing and accessible to a broader range of companies and investors. Here are just some of the technological innovations that are changing the 

 Technologies like AI and machine learning are used to assess market conditions, set optimal pricing, and automate the bookbuilding process. This reduces human error and speeds up decision-making. In the US alone, it's estimated that 

 These platforms facilitate the collection and analysis of investor demand, allowing underwriters to set prices more accurately and efficiently.

 Regulatory bodies like the SEC have developed 

 systems (e.g., EDGAR) that allow companies to submit required documents digitally, speeding up paperwork and processing times.

 Companies can distribute electronic versions of the prospectus and conduct 

, reaching a wider audience without the need for physical travel.

These platforms use AI to match companies with potential investors based on investment profiles and preferences. This not only improves the efficiency of capital raising for companies but also helps investors find new opportunities quickly and easily.

Blockchain can be used to tokenize shares, providing a more efficient and transparent way to manage ownership and transfer of shares.

These can automate compliance with regulatory requirements and streamline the execution of transactions, reducing administrative overhead.

Crowdfunding and online brokerage platforms:

 These platforms provide easier access for retail investors to participate in IPOs, democratizing investment opportunities.

 Companies and underwriters use big data analytics to gain insights into market trends and investor behavior, aiding in better decision-making throughout the IPO process. Many of these systems can connect thousands of data sources and pull all the data you need to make an informed decision together in seconds.

Investor relationship management (IRM) tools:

 tool, help manage secure communications and relationships with potential investors, providing data-driven insights into investor interests and behaviors.

Advanced encryption and security protocols: 

Ensuring the security and confidentiality of sensitive information during the IPO process is critical. Advances in cybersecurity and 

 help protect against data breaches and cyber threats.

 RegTech solutions automate compliance checks and ensure adherence to regulatory requirements, reducing the risk of non-compliance and associated penalties.

 and reporting tools help companies stay compliant with regulatory requirements more efficiently.

Video conferencing and virtual data rooms:

 among stakeholders, including legal teams, underwriters, and company executives, improving coordination and reducing delays.

 AI and machine learning models predict market conditions and investor behavior, helping to optimize the timing and pricing of the IPO.

 NLP tools can analyze large volumes of text data from regulatory filings, news, and social media to gauge market sentiment and identify potential risks.

, combine all of this technology into one easy-to-use, easy-to-manage and collaborative platform. Directors and executives use Diligent Boards to make 

 and other critical tasks easier. This helps them successfully prepare for a strong IPO.

In the first half of 2024, the volume of global IPOs fell by 12%, with 551 listings raising $52.2b in capital. This drop is mainly due to a slowdown in Asia-Pacific IPO activity as the Americas, Europe, the Middle East, Africa and India saw robust growth, with Europe stealing the show with 46% of the total number of global IPOs.

US and Canada remain core to the IPO landscape. In the US, 80 new IPOs rolled out in H1 of 2024, with proceeds rising by 25% year-over-year. The industrial sector continues to lead, with significant contributions from tech companies being responsible for the majority of the IPOs in North America in 2024.

The IPO market 2024 in Europe is booming and shows no signs of slowing down. With a total market share of 45% of global IPOs, Europe has achieved its highest global market share since the 2008 Global Financial Crisis. This is thanks, in large part, to major European listings, which show that larger companies perceive the current market conditions as an optimal IPO window.

Once seen as a hotbed for IPOs, this region has been experiencing geopolitical tensions, elections, economic slowdowns, heightened interest rates and a market liquidity drought. All of these factors have led to caution amongst investors. As a result, the region experienced a staggering slowdown and decline of 43%, with just 216 IPOs listed.

 Regularly monitor market conditions and regulatory changes to ensure compliance and strategic alignment.

 GCs should stay updated on the latest IPO trends and legal implications to ensure the company meets all regulatory requirements and aligns strategically with legal frameworks.

 CoSecs can monitor market conditions and advise on the optimal timing for the IPO, assessing investor sentiment and market readiness.

 Utilize advanced tools like Diligent Boards to manage IPO processes efficiently and securely.

 Be aware of regional variations in IPO trends and tailor strategies accordingly.

 Maintain clear communication with all stakeholders to ensure a smooth and successful IPO process.

 Develop contingency plans to address potential market volatility and investor concerns.

Potential shifts in industries or sectors may lead or lag in IPO activities. For instance, advancements in green technology and biotech are likely to lead, while traditional sectors may see slower growth. Slower growth doesn’t always mean a fail, though, as we discuss in 

Upcoming economic forecasts suggest a mixed outlook, with potential continued growth in some markets and cautious optimism in other economies. These forecasts will influence IPO strategies, as companies seek to capitalize on favorable conditions.

IPO market trends currently suggest that the Asia market will continue to slow down, but the European market will continue to grow. However, with political changes potentially affecting the economy in both markets, the IPO trends in these regions are subject to change.

Smoothly navigate your IPO journey with our 7-step guide

Navigating IPO trends requires thorough preparation and strategic insight. To ensure your company's successful transition to the public market, download our comprehensive whitepaper, 

The Road to IPO Starts Now: 7 Steps for Going Public the Right Way

 This guide provides invaluable tips and best practices to navigate current IPO trends and achieve your business goals.

The road to IPO starts now. Leverage our expertise and resources to make your public debut a success.

2024 IPO trends: An overview for legal professionals & corporate secretaries

Organizations that excel in managing risk see substantial performance improvements, often outperforming others by a significant margin. In fact, organizations with strong risk management and security practices tend to perform four times better than those without.

In a session at the Diligent Elevate 2024 customer conference, industry experts gathered to share their experience and to discuss practical strategies for reporting risk to leadership. Our panel of experts included:

John Horn, Director, Cybersecurity Practice, Datos Insights

Derek Vadala, Chief Risk Officer, Bitsight Technologies

Inna Barmash, Chief Legal Officer and Corporate Secretary, Amplify

Maurice L. Crescenzi, Jr., Industry Practice Leader, Moody's

During the session, panelists also shared key insights and actionable advice, aimed at helping risk managers navigate the task of reporting to the board. In this two-part series, we explore some of the key themes that the discussion covered along with practical tips and tactics for better ways of reporting risk to leadership. 

Building trust with leadership is essential for effective risk communication. Encourage open dialogue and be transparent about the challenges and uncertainties. This approach not only builds credibility but also enables leaders to make informed decisions. When trust is established, leadership is more likely to support risk management initiatives and integrate them into broader business strategies.

Effective communication starts with being proactive. Don't wait for leadership to come to you with questions. Provide regular updates and be forthcoming about any emerging risks or changes in the risk landscape. This proactive stance shows that you're on top of your game and committed to safeguarding the organization.

Encouraging open dialogue is equally important. Invite leaders and board members to ask questions and express their concerns. Make it clear that their input is valued and that you're committed to addressing any issues they raise. This two-way communication can lead to more robust risk management practices and a more resilient organization.

By fostering an environment of openness and trust, you'll not only enhance your risk reporting but also create a culture where risk management is a shared responsibility, leading to more informed and strategic decision-making across the board.

Crescenzi advised that “Part of building trust and laying the foundation for understanding risk is using plain language. Most companies organize 

Keep it practical in updates to the board. It’s easy to get lost in the data, so instead, talk about the top three or four or five risks in very simplified ways.”

A major hurdle in reporting risks is unclear definitions. Without a common language, communication breaks down. Begin by defining what risk means for your organization.

Are you discussing operational risks, financial risks or reputational risks? Clarify these terms to ensure everyone, from the board to the team on the ground, is on the same page. This alignment fosters more focused and effective discussions.

It's crucial to standardize the terminology used in risk reports, making it easier for everyone to understand the severity and implications. Whether you're dealing with supply chain vulnerabilities or regulatory compliance issues, precise definitions help in identifying, assessing and mitigating risks more effectively. This step is foundational; it sets the stage for all subsequent risk management activities and ensures that your communication is clear and actionable.

Barmash suggested that risk managers “calibrate with the management team, the participants in the risk assessment and the board. It’s very important to define risks precisely and also align on what we mean by high priority risks, low priority risks, etc., to really talk about impact and likelihood. That both stimulates a good conversation and also a more robust risk assessment.”

"Calibrate with the management team, the participants in the risk assessment and the board. It’s very important to define risks precisely and also align on what we mean by high priority risks, low priority risks, etc., to really talk about impact and likelihood. That both stimulates a good conversation and also a more robust risk assessment" - Inna Barmash, Chief Legal Officer and Corporate Secretary, Amplify

A key takeaway from the discussion was the importance of simplifying complex topics. Synthesizing data into understandable formats for board members is essential for effective risk reporting.

Vadala pointed out, "What happens is people tend to go into the boardroom with metrics and stats and very elaborate slides about what's going on in the organization and what people should be worried about. You really have to synthesize that into understanding the mindset of the board and the context of risk management."

This involves not only presenting data but also interpreting it in a way that aligns with the board's strategic objectives and risk appetite.

Translating technical risks into business-relevant language is also crucial for effective communication with board members.

Risk managers must bridge the gap between technical jargon and business implications to ensure that leadership understands the risks and can make informed decisions.

As Horn put it, "GRC (governance, risk and compliance) is just a translation exercise, a very complicated, ongoing translation exercise."

Vadala advised trying to make a particular discussion about a risk relatable to at least some portion of the board's prior experience: “Do the right biographical research on board members to really understand where they're coming from, what types of stories are relatable to them. We tend to just use narratives that are relatable to ourselves. That's often not a great way to get people to engage in what you're trying to tell them.

If you make it relatable to them and their prior experience, you tend to get more buy-in, engagement and then credibility. So, if you have a board member that came from the supply and logistics industry or from healthcare, being able to contextualize that into areas that they have spent a lot of time in tends to be much more effective.”

Keeping the board and everyone in the risk management chain informed is imperative — but how can you deliver that information in a way that’s cost-effective, centralized and scalable? Our checklist "The 4 C's of effective ERM reporting" offer helpful tips for taking your ERM reporting to the next level. Download the checklist 

Using practical tools for reporting risk management

The panel highlighted the use of simple, practical tools like risk heat maps and scenario planning. These tools help visualize risks and their potential impacts, making it easier for leadership to understand and prioritize risk mitigation efforts.

Barmash described how heat maps had helped switch on the proverbial light bulb for her board, “Everyone had their own idea of risk. So, we worked on an assessment and an internal calibration effort to really educate people on impact and likelihood and what we really mean and what are the implications of the word risk. And the first presentation to the board was, well, here are some risks.

And it really wasn't until we presented a heat map that I literally felt a sigh of relief in the boardroom at the recognition. A heat map is really a conversation tool in terms of communicating and of going back to storytelling. Once you find your story, it's really important to find a platform for telling the story.”

Vadala discussed scenario-oriented planning, saying it’s important to ask “What are the things that are potentially going to cause impact damage to your organization? Are you focused on the right ones? Do they feel plausible even if they are unlikely or very infrequent? But are they things that a reasonable person with reasonable knowledge of the business could believe could happen?

And how do you then put that into a context that the board can help prioritize and understand and not just sort of have this long list of potential risks on a risk register, but really link those back to compromise of protected health information about customers due to a ransomware event.”

As the digital landscape and threats continue to evolve, so must our approach to risk management. By staying proactive, collaborative and focused on clear communication, risk managers can ensure that leadership is well-informed and equipped to make data-driven decisions that help protect the organization from risks.

To keep up and stay ahead of risks, you need a consolidated view of governance, risk and compliance across your organization.

 for a unified perspective on risks and impactful insights that guide better decision-making.

See how Diligent One can help you streamline your risk management processes. 

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2024 IPO trends: An overview for legal professionals & corporate secretaries

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2024 IPO trends: An overview for legal professionals & corporate secretaries

Reporting risk to leadership: Simple strategies part 1

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