The U.S. stock market saw 1,035 initial public offerings (IPOs) in 2021 — an all-time record. In 2022, there were only 180, which was 82.6% lower, according to stockanalysis.com.
This collapse of the IPO market is a problem for cloud infrastructure startups and their venture capitalist funders, which model their plans on the companies either being bought or having an IPO before they run out of money.
Those timelines have had the snot kicked out of them by a trifecta of bad-news, bear market conditions, COVID-19, inflation and now a nice brisk recession. That puts startups at risk of being forced to sell at a subpar valuation, take a smelly down round or just go out of business, which is the fate of most startups anyway.
Will the IPO market rally next year? Some financial analysts think things will improve in 2H 2023, but since they've been hilariously wrong about everything else they've forecasted over the last five years, flipping a coin might be an equally accurate and less expensive way to work out what will happen.
Either way, we're sending hopes and non-denominational prayers to our colleagues in the cloud infrastructure startup community.
This article was updated on Jan. 6, 2023.
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