Tech IPOs fell sharply after 2021's record high

US tech giants have enjoyed a wave of success in the US stock market, driving much of the rise in the S&P 500 index since the outbreak of the pandemic (in 2020) to date. Five of the companies currently referred to as the "Magnificent Seven" (Apple, Amazon, Microsoft, Alphabet, Nvidia, Meta and Tesla) are giants in the technology space, with market capitalizations that rival the size of the US GDP.

Analyzing the evolution of the number of initial public offerings (IPOs) of technology companies on the American stock exchanges from 1980 to 2023, according to the data "Initial Public Offerings: Updated Statistics", a database created by economist Jay R. Ritter from the Warrington College of Business , University of Florida, we note that new listings in the field recorded, in 2021, the maximum record of the last 20 years, according to visualcapitalist.com.

According to the cited source, from the peak period of the Dotcom boom, when in 1999, more than 350 technology companies went public, the number of IPOs in the field has decreased significantly over the years. The Dotcom boom, driven by investor enthusiasm for Internet technologies, was followed by a decline due to a lack of capital and business viability, which had a significant impact on the market. The number of technology IPOs remained in the double digits for the next 20 years.

According to the mentioned database, in 1980 there were 22 IPOs of technology companies on the US market, in 1981 - 72, in 1982 - 42, in 1983 - 173, in 1984 - 50, in 1985 -37, in 1986 - 77, in 1987 - 59, in 1988 - 28, in 1989 - 35, in 1990 - 32, in 1991 - 71, in 1992 - 115, in 1993 - 127, in 1994 - 115, in 1995 - 205, in 1996 - 276, in 1997 - 174, in 1998 -113, in 1999 - 370, and in 2000 - 261. In 2001 there were 24, in 2002 - 20, in 2003 - 18, in 2004 - 61, in 2005 - 45, in 2006 - 48, in 2007 - 76, in 2008 only 6, in 2009 - 14, in 2010 - 33. In 2011, the figures show 36 IPOs, in 2012 - 40, in 2013 - 45, in 2014 - 53, in 2015 - 38, in 2016 - 21, in 2017 - 30, in 2018 - 40, in 2019 - 38, in 2020 - 48, in 2021 - 126, in 2022 - 6, in 2023 - 9.

However, in 2021, IPOs of technology companies saw a significant increase, as a result of increased demand for digital services due to the lockdown and social distancing measures imposed due to the pandemic. This has fueled the prospects for new listings in the technology segment, particularly in e-commerce and remote workspaces.

As a result, the number of US tech company IPOs hit a 20-year high in 2021: 126. These listings included online gaming platform Roblox, dating app Bumble and management software company Monday.com projects.

Since then, however, tech IPOs have fallen back to single digits in both 2022 and 2023, driven largely by interest rates, central bank policy weighing on private company valuations and market sentiment .