Will the IPO market recover in 2024 with companies like Reddit and Shein aiming to go public?

The Outlook for IPO Markets in 2024.

IPO markets are slowly but surely getting back to old times, companies are lining up to IPO in 2024 in hopes that they can raise money and give early investors their so desired exit.

It’s scary when investors get caught up in their own hype bubble, It happened when the SPAC bubble burst and is what has happened in the IPO market in these past two years. Let’s take a look at Instacart, they raised their $265 Million dollar Series I in which investors invested at $125 a share. It was a great sight when Instacart shares traded on secondary markets for as high as $133 per share, but not so great when major firms Andreessen Horowitz, D1 Capital Partners, Fidelity, Sequoia Capital, and T. Rowe Price (Just to name a few), all lost major money (at least on paper) when Instacart went public. Even if these firms are still sitting on their losses it’s gonna take a long time (if ever) for Instacart to trade at $125 a share.

Instacart now trades at around $24 at the date that this is published, down 28% from their offering price.

Companies will hope they don’t end up like Instacart (NASDAQ: CART), which had a $39 Billion dollar private round valuation just two years ago in 2021, and now holds a valuation of just $6.74 Billion. But more towards IPOs like Arm (NASDAQ: ARM), Birkenstock (NYSE: BIRK), and Cava (NYSE: CAVA), which stocks are all up so far since their respective IPO dates.

As 2024 progresses the IPO market will be more and more attractive for investors as interest rates are expected to go down and markets are gonna be once again, attractive for businesses wanting to go public.

Bessemer Ventures Partner, Byron Deeter, says that Quarter Two of 2024 is what he is looking forward to. Why? Companies will release their earnings, interest rates will hopefully have stabilized a bit and the pipeline of companies that have loaded up an IPO filing will finally be able to start looking toward those markets. He also states that all of this depends on macroeconomic stabilization.

Some companies that are looking to IPO in 2024 are Reddit, Turo, SHEIN, Skims, Liquid Death, DataBricks, and Stripe.

Sources: Pitchbook, CNBC