The headline number hides the typical deal
Renaissance Capital's third-quarter review counts 30 US IPOs that raised $32.8 billion. Taken alone, that reads like a healthy quarter. The detail underneath tells a different story.
The largest deal was SK hynix (SKHY), the Korea-listed memory chip maker, which raised $26.5 billion in its US offering. Excluding it, proceeds were $6.2 billion. Dividing $26.5 billion by $32.8 billion gives about 81%, so a single offering accounted for roughly four of every five dollars raised.
That leaves 29 other deals sharing $6.2 billion, an average of roughly $214 million each. The average is flattered by the bigger deals, though. Renaissance says 18 of the 30 listings raised $100 million or more, which implies 12 raised less. The typical IPO in the quarter was a mid-sized offering, and a good share were small.
None of this means the market was closed. It means the aggregate is a poor guide to what an ordinary issuer can expect. A founder reading "$32.8 billion raised" and concluding that capital is flowing freely to companies like theirs would be reading the wrong number.
Why activity fell short in the fall
Renaissance describes the quarter as modest, with activity solid over the summer but short of expectations in the fall, and with more postponements near quarter-end. It points to three pressures:
- Investor concern about AI spending.
- Bond yields at a 19-year high.
- The resumption of interest rate hikes.
Each hits IPO candidates differently. Higher yields raise the discount rate applied to growth companies, which compresses the valuations they can ask for. Rate hikes also make cash-flow-negative issuers harder to underwrite. AI-spending worries matter most for the AI infrastructure names that Renaissance says remained a main theme alongside biotech.
Renaissance also noted that offerings spread across a wider range of industries than in prior quarters. Its profiles for the period include Jersey Mike's (JMKE), Oura (OURA), Csquare (CSQR) and Accelevation (ACCV). The review as I could access it did not describe how those deals priced or traded, so I am not drawing conclusions about their performance.
October started small
The fourth quarter opened with two biotech deals. In its October 2 week-ahead note, Renaissance listed:
- TRex Bio (TRXB), an autoimmune company planning to raise $125 million at a $453 million market cap, with a $14 to $16 range.
- Retension Pharmaceuticals (RTSN), a hypertension developer planning to raise $40 million at a $108 million market cap, with an $11 to $13 range.
Those were planned terms. I could not verify how either deal priced or traded, so treat them as examples of the size of deal that is actually getting launched. Both are well under $200 million.
By October 16, Renaissance reported that no IPOs were scheduled for the week ahead. It also noted four lock-up expirations that week. Lock-up expiries matter to the next cohort of issuers because they add potential supply from earlier listings and can weigh on shares of recent IPOs.
Recent IPOs have stopped outrunning the market
Renaissance's IPO Index offers a scorecard on how new listings are trading. As of October 1, it was up 16.4% year to date against 13.0% for the S&P 500. By October 15, it was up 12.1% against 14.2% for the S&P 500, according to the October 16 note.
In two weeks, the gauge went from a 3.4-point lead to a 2.1-point deficit, a swing of 5.5 points. Those spreads are my arithmetic from Renaissance's figures. The direction is the point: the premium investors had been paying for recent issuers narrowed quickly.
The international gauge held up better. Renaissance's International IPO Index was up 28.5% against 13.8% for the ACWX as of October 1, and up 14.3% against 11.9% as of October 15. It also gave back a lot of its lead, but it remained ahead of its benchmark.
IPO or private round: what founders can take from this
This is commentary, not advice, and every company's situation differs. But the data points toward a few practical distinctions.
The public window is open mainly for scale. The quarter's biggest proceeds came from a very large issuer. Smaller companies were listing, but at modest sizes, and the fall brought postponements. If your plan assumes a deal in the hundreds of millions of dollars, check how many comparable deals actually priced rather than relying on the aggregate.
Postponement is a real cost. Renaissance flagged more postponements near quarter-end. A company that pulls an IPO has still spent on audits, counsel and bankers, and has told the market it wanted to raise. Founders weighing a listing should decide in advance what price and size would make them pull, and what private financing they would fall back on.
Private rounds are a hedge, not a failure. When yields are high and rate hikes are returning, a company with strong fundamentals may be better served by a private raise, or a structured extension, than by accepting a discounted public price. The reverse is also true: a company whose growth depends on a large, scarce pool of capital may not find it privately at any price. The decision turns on how much you need to raise and on what valuation you can defend with comparables that actually traded.
Newly listed peers set your price. If recent IPOs are trailing the broader index, as the October data shows, investors will price your deal against that experience. Study the aftermarket performance of the closest recent comparables, not just their offer prices.
What to watch next
- The calendar. Renaissance's October 16 note showed an empty week. A pickup in launches would signal that issuers see a better window.
- The index spread. Whether the IPO Index recovers its lead over the S&P 500 or falls further behind is the clearest read on public appetite for new issues.
- Yields and rates. Renaissance named both as pressures. Any easing would help growth issuers most.
- Deal size mix. Watch whether the share of deals above $100 million rises from the 18 of 30 seen in the third quarter.
- Lock-up supply. Expirations can pressure recent listings, and with them the comparables used to price new deals.
The takeaway for the quarter is not that the IPO market is weak or strong. It is that one outsized offering made it look stronger than it felt to nearly every other issuer. Build your plan from the median deal.