{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.text}}
Key takeaways:
- The US IPO market has entered a sustained recovery, not just a brief window. The second quarter built meaningfully on Q1’s momentum with broad sector participation, suggesting structural improvement rather than isolated bursts of activity.
- A handful of landmark transactions are testing market capacity this year—and, so far, the market has passed. The largest IPO in history did not crowd out other issuers, and additional mega-IPOs are still on the horizon for the second half of 2026.
- AI continues to dominate venture capital activity. While liquidity conditions improved modestly through secondary transactions and a strengthening IPO backdrop, distributions remain below historical levels and fundraising cycles have lengthened for many managers.
Building on the strongest opening quarter since 2021, the IPO market accelerated through the second quarter of 2026. Through June 30, traditional IPOs raised approximately $114.1 billion, more than seven times the $14.8 billion raised over the same period in 2025. While a single large-scale transaction accounted for a significant portion of total proceeds, the amount raised excluding that deal was still almost three times higher than in the first half of last year.
The second quarter built meaningfully on the momentum established in Q1. Unlike prior recovery cycles—where momentum often stalled after a strong start—deal flow remained broad-based, spanning AI infrastructure, industrials, healthcare, and consumer sectors. Several issuers that delayed their offerings following the government shutdown in late 2025 returned to the market, executing successfully as the window remained open.
The quarter’s defining event was a record-breaking IPO by SpaceX, a space and AI technology company. The transaction became the largest IPO in history and demonstrated the depth of investor demand for scaled, category-defining growth businesses, as well as the continuing interest in AI infrastructure. The offering also prompted questions about whether a transaction of that magnitude would absorb liquidity from the broader IPO market. On balance, the wider IPO calendar continued to function alongside the deal, suggesting institutional demand was sufficient to support both large-scale issuers and the broader pipeline of companies seeking to access the public markets.
Investor demand remained concentrated in several key themes during the quarter, including AI infrastructure, space and defense tech, power generation, grid infrastructure, and advanced manufacturing. These offerings reflect growing investor interest in businesses positioned to benefit from long-term spending on AI infrastructure, energy security, and supply chain resilience.
Biotechnology also showed signs of renewed momentum with 13 IPOs pricing during the quarter, including the two largest biotech IPOs in history (in terms of offering size) and several offerings that traded well following their debuts. The sector’s improved performance stands in sharp contrast to 2025, when only seven biotech IPOs priced during the full year. This indicates a return of risk appetite within portions of the healthcare market.
Looking ahead, the IPO pipeline remains strong. During this past quarter, OpenAI and Anthropic, which are two of the most highly valued AI companies, confidentially filed for public offerings. If market conditions remain supportive, these transactions would likely rank among the largest tech IPOs in history and represent an enormous share of issuance during the second half of 2026. Their eventual performance will likely serve as an important barometer for investor appetite for large-scale growth companies and could further influence the pace of broader venture-backed IPO activity.
The macroeconomic backdrop remains supportive, despite some notable challenges. GDP rebounded in the first quarter following a soft Q4, supported by strong business investment and continued technology-related spending. At the same time, inflation has reemerged as a key focus for investors and policymakers, as potential tariff-related pressures, healthcare costs, and recent energy market disruptions added uncertainty to the outlook.
Against this backdrop, the Federal Reserve kept the federal funds rate unchanged at its June meeting, but signaled a more hawkish outlook as inflation risks remain elevated. While policymakers continue to emphasize a data-dependent approach, updated projections suggest rates could move higher before year-end if inflationary pressures persist.
We continue to view the IPO market as open for companies with the right fundamentals, including appropriate scale, durable growth, a credible path to profitability, and the operational maturity to function as a public company from day one. Even so, current conditions reinforce that windows can open and close quickly. Companies that are ready, flexible, and disciplined on valuation will be best positioned to execute.
IPO activity accelerated further in Q2, making 2026 the strongest first half for US IPOs since 2021
Through the first six months of the year, 65 traditional IPOs raised approximately $114.2 billion, compared to 34 IPOs that raised $14.8 billion during the first half of 2025.
Investor demand has remained constructive, with nearly half of IPOs during the year pricing at or above the top end of their marketed price ranges. This reflected strong book-building dynamics and continued valuation discipline from investors. In addition, approximately 97% of these IPOs opened above their offer price on their first day of trading, demonstrating positive aftermarket demand and improving market receptivity.
Post-IPO performance has also remained favorable, with the average first-half IPO outperforming the S&P 500 by 8%, suggesting that investors continue to reward companies with differentiated growth profiles, strong fundamentals, and clear equity stories.
The year’s largest offering was SpaceX, which has appreciated approximately 27% since pricing and helped drive a significant portion of overall capital raised. Beyond this transaction, several notable offerings reflected the strength of the market. One of the quarter’s other largest IPOs was AI computing infrastructure company Cerebras Systems Inc., which priced more than 50% above its initial filing range. The company opened 89% above its offer price, highlighting strong investor demand for companies positioned at the center of the AI ecosystem.
Another notable transaction was Innio, an industrial technology company focused on energy and mission-critical infrastructure solutions, which priced at the top end of its marketed range and has appreciated approximately 46% since its debut. In addition, Madison Air, an air quality and cooling solutions company serving data centers priced at the top end of its range and is up roughly 44% since pricing. Together, these transactions demonstrate continued investor appetite for scaled businesses with exposure to AI, digital infrastructure, and other long-term secular growth themes.
SPAC issuance has continued to accelerate, reaching its highest level since 2021. Through the first half of 2026, 118 SPAC IPOs raised approximately $20.9 billion, compared to 66 SPAC IPOs raising roughly $11.8 billion in the same period in 2025. The increase reflects growing sponsor confidence and improving capital markets conditions, particularly for experienced management teams with differentiated sector expertise.
Despite the rebound in SPAC IPOs, de-SPAC activity continues to lag. Through the first six months of 2026, only 18 de-SPAC transactions have been completed, compared to 22 during the same period in 2025. The disparity between SPAC issuance and business combination activity underscores the continued selectivity of investors and targets, as well as the ongoing challenges associated with completing transactions in the current regulatory and financing environment.
US IPOs, S&P 500 and VIX
VC confidence remains concentrated in AI as liquidity pressures build
Through Q2 2026, venture capital activity remained meaningful in dollar terms, but conviction and deployment were still concentrated around a relatively small number of AI-related companies. While liquidity conditions improved modestly through secondary transactions and a more constructive IPO backdrop, realization activity remained below historical levels and fundraising conditions remained challenging for many managers. As a result, the key question remains whether momentum in AI can broaden into a more durable recovery across sectors, stages, and the broader venture ecosystem.
- Liquidity conditions are improving but remain uneven. Secondary activity and selective exit opportunities have increased, but distributions remain below levels needed to meaningfully relieve limited partner (LP) liquidity pressure or support broad re-risking across private market portfolios.
- Valuation expectations continue to reset outside of core AI sectors. Companies and boards are increasingly willing to pursue transactions at pragmatic valuations, including below prior private-market highs. While this is helping reopen liquidity pathways, it also reflects continued pressure on businesses that were financed at peak-cycle multiples.
- The private company backlog remains substantial. A growing number of highly valued companies are preparing for potential public market debuts, but execution risk remains elevated as valuation expectations should align with a selective investor base. Successful offerings could support broader confidence, while disappointing outcomes could further delay recovery.
- Secondaries have become a core source of liquidity. LP-led, GP-led, and company-sponsored transactions continue to expand, providing an increasingly important avenue for liquidity. Demand remains strongest for AI-related assets, reinforcing concentration trends across the venture ecosystem.
- AI continues to dominate capital formation. Eight financings exceeded $1 billion during Q2, with approximately 95% of the funding going to AI-focused companies. While this concentration continues to support funding momentum for category leaders, it has not yet translated into a broad-based recovery across venture markets.
- Early-stage investing remains active but disciplined. Series A deal value totaled approximately $26.7 billion during the first half of 2026, up from $19.3 billion in the first half of 2025, reflecting continued investor willingness to fund compelling businesses. However, underwriting standards remain focused on monetization, capital efficiency, and execution certainty.
- Fundraising conditions remain challenging for many managers. Capital continues to gravitate toward larger, established platforms with stronger track records and portfolio support capabilities. For many emerging managers, fundraising cycles remain longer and increasingly dependent on demonstrated liquidity outcomes and portfolio performance.
FAQs
With you when the bell rings
To create a clear path forward, you need the confidence that comes from working with a team of straight-talking advisors and actionable insights from a team of dedicated professionals. Find out how we can guide you through each step of the readiness assessment process and beyond.
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Contact us
Follow us
