糖心视频

The second quarter of 2021 is behind us, with a record first half of the year in terms of proceeds raised from traditional initial public offerings.

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By all measures, things aren鈥檛 slowing down. The IPO market is on pace to have a record year, according to a senior strategist at IPO research firm . According to the firm, IPO proceeds have reached $80 billion so far this year, already surpassing the $78.2 billion raised in all of last year.聽

That鈥檚 not including SPACs or direct listings.聽

鈥淚 think low interest rates have pushed up valuations for growth companies and the hundreds of unicorns in the pipeline are looking to take advantage of that,鈥� Kennedy said in an interview. 鈥淎nd I think right now we鈥檙e seeing companies that both benefited from the pandemic as well as companies that are pitching post-pandemic stories.鈥澛�

Deal sizes are also getting bigger. So far this year, there鈥檚 been a record number of IPOs that have raised $1 billion or more. Kennedy pointed to s IPO as an example of a company that was basically pre-revenue 鈥� it had about $2 million in revenue 鈥斅燽ut nevertheless had no problem raising more than a billion dollars through its IPO.

聽鈥淐ompanies are able to stay private for longer and grow to enormous sizes as private companies,鈥� Kennedy said. 鈥淚 know that 20 years ago you wouldn鈥檛 see a company IPO with a $10 billion valuation as a startup, a relatively new company or as a relatively early-stage tech company.鈥�

Last year was a record year for Renaissance Capital鈥檚 IPO Index, which reflects the top 80 percent of newly public companies, based on full-market capitalization. And that means investors who have made money are continuing to look to the IPO market for returns.聽

So far this year, there have been several high-profile IPOs for venture-backed companies, including buy now, pay later fintech company , dating app , and edtech company . Other high-profile startups with lots of name recognition, including stock trading app and language-learning platform , have also recently filed to go public in the second half of the year.聽

The second quarter of 2021 was also the largest quarter in 20 years in terms of both IPO proceeds raised and deal count, according to Renaissance Capital. The health care sector — biotech in particular — led the pack, followed by tech, which had its most active quarter in 20 years, the firm said.

Earlier in the year, inflation concerns had investors worried that the Federal Reserve might change its policy, according to , senior vice president of data strategy at . But after the Fed said that inflation wouldn鈥檛 change over the long term, 鈥渋t鈥檚 like the summer of IPOs,鈥� he said.

It鈥檚 both smaller companies and big-name companies that are going public this year, Cordone added, pointing to Duolingo and as examples of well-known companies to file paperwork for an IPO.聽

鈥淚t鈥檚 not just kind of the small biotechnology and small technology growth companies that are trying this thing, there are big household names,鈥� he said.

Liquidity is driving a lot of the activity, Cordone said, as there鈥檚 a lot of cash in the market looking for yield. Retail investors also 鈥渏umped in big鈥� last year and into this year, meaning it’s not just institutional investors who are participating in the market.聽

But inflation is still top of mind.聽

鈥淲e鈥檙e just entering earnings period now, second quarter earnings, so investors are really trying to scrutinize earnings now for any signs of inflation,鈥� Cordone said.

The IPO window can be boom-or-bust, so investors take advantage of the market while it’s hot, according to Kennedy.

鈥淥ne reason we may be seeing so much activity is that companies are going public while they can because they know the window can close so quickly,鈥� Kennedy said.

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