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What will it take for the IPO market to return?

Q1 2023 IPO markets slowed with 33 IPOs on US exchanges, but optimism remains for the remainder of 2023.

In summary
  • In Q1 2023, both the number of IPOs in the US and the amount of proceeds raised were generally in line with Q1 2022, but they were well below levels seen in comparable periods over the last decade.
  • For the US IPO market to rebound, the first wave of IPOs will need to come to market at reasonable valuations, price well compared to their marketing ranges, and trade well in the aftermarket.
  • In light of the prevailing market uncertainty, companies should focus on cash flows, profitability and liquidity, as well as strategically preparing for open market windows.

US IPO deal count and proceeds

In Q1, there were 33 IPOs on US exchanges. Only eight of the US IPOs raised more than $50m, and the largest US IPO raised just over $700m. While there was some optimism that deal activity would rebound at the beginning of the quarter, the pace of transactions began to slow in February, when audits went stale, and never picked back up in March.

Despite the ongoing uncertainty around the macroeconomic and geopolitical environment, the IPO pipeline continues to build, and a number of key factors provide hope for a turnaround later this year.

“IPO activity has been light so far this year, but we are encouraged by some signs of stabilization or improvement in inflation readings, market volatility, earnings estimates and valuation multiples,” says Mark Schwartz, Americas Capital Markets Advisory Leader. “Greater clarity and certainty in these areas could provide a stronger backdrop for a return of the IPO market as soon as later this year.”

Six factors that could improve the IPO market backdrop

1. Inflation moderating or declining

2. Interest rate hikes slowing, stopping, or reversing

3. Market volatility remaining subdued

4. Commodity prices stabilizing

5. Growth stocks performing

6. Earnings estimates remaining stable or improving

2023 US IPO outlook


Although momentum is not on our side as we exit Q1, companies can use this time to prepare themselves for a future IPO, building muscle memory around operating like a public company — preparation is critical and will create optionality to capitalize on fleeting open market windows.


“Companies waiting for the public markets to reopen should use this quiet period to their advantage,” says Americas IPO Leader Rachel Gerring. “Focus on building rigor around corporate governance, accounting and management development. Operating as a public company requires meticulous preparation to confidently face unexpected hurdles. With proper preparation, companies will be better positioned when the window of opportunity reopens.”

The path forward – top five things IPO aspirants should do now

  1. Do what you do best — focus on the near-term, actionable growth drivers in your business.
  2. Capitalize on margin expansion opportunities and optimizing cash flow. Managing capital carefully and emphasizing profitability are paramount in this market environment.
  3. From a financing perspective, solve for liquidity before valuation.
  4. Integrate environmental, social and governance (ESG) into your strategic priorities.
  5. Last, but not least, don’t let your IPO plans get derailed. Continue to strategically manage your IPO preparation timeline and milestones.


While IPOs raised US$21.5b, there was still an 8% and 61% decrease year-over-year (YOY), respectively, in Q1 2023 due to prevailing market uncertainty.

Global IPO markets experienced a similar stuttering start to 2023

With a total of 299 IPOs raising US$21.5b, an 8% and 61% decrease year-over-year (YOY), respectively, Q1 was another quiet period amid interest rate rises, inflation and unexpected global banking industry turbulence.

Download our latest IPO report

The full EY Global IPO Trends Q3 2023 report provides deeper analysis and insights.

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