High-profile departures can’t revive sluggish Q2 IPO market

The “vibecession” continues, somewhat, in the IPO market, where deal activity in the U.S. remained a mixed bag during the second quarter of 2024.

Data from the latest PitchBook-NVCA Venture Monitor update shows that dealmaking globally remains sluggish due to a combination of relatively high interest rates, high prices, and uncertainty—which have also affected the U.S. market. The data shows that though U.S. deal activity has increased for the last three quarters, “exits remain elusive,” said PitchBook VC analyst Kyle Stanford, in commentary included in a release from PitchBook. And though there was an increase in exit activity, it was “driven by small deals.”

Ultimately, Q2 saw $23.6 billion in exit value generated in the U.S., less than the preceding quarter. Overall, the data shows that total VC deal value tallied nearly $56 billion, comprising more than 3,100 deals. The numbers are rosier than they were in 2022 and 2023, but, as Stanford says, “the market is facing its lowest exit total since 2016.”

However, some high-profile IPOs pulled up the IPO market during the quarter. Those include IPOs from Reddit, Ibotta, and Aster Labs. “The IPO market has faltered in its restart, despite two high-profile IPOs in the first month of the quarter,” Stanford says. Overall, 2024 is on track to be a better year than 2023 but still lackluster compared to the pre-pandemic period.

For investors, there are still several high-profile potential IPOs waiting in the wings. Those include fast-fashion company Shein, quick-service stalwart Panera Bread, Kim Kardashian’s shapewear company Skims, and payment-processing company Stripe. Those could provide the IPO markets in the U.S. some further juice, assuming they do decide to go public.