This has been the best year for U.S. initial public offering activity since the last peak in 2021. Next year could be even better. 

As of late December, companies going public have raised more than $41 billion in the U.S., according to capital markets data provider Dealogic, above 2023’s roughly $24 billion and the $22 billion raised in 2022.

That’s still a sliver of the record $316.6 billion raised in 2021, when listing candidates rushed to raise money in an era of low interest rates. But investors are looking for an IPO pickup in the year ahead.

After 2021, the IPO Market Froze

The IPO market turned decidedly chilly as the special purpose acquisition company (SPAC) craze fizzled and a wave of IPOs disappointed investors with their subsequent performance.

Electric vehicle manufacturer Rivian Automotive (RIVN), for instance, has since lost more than three-quarters of its value since going public in early 2022. IPOs in the U.S. fell 16% on their first day of trade on average in 2022, Dealogic data show.

The Federal Reserve also began a wave of interest-rate hikes in March 2022 to cool inflation, eventually bringing the fed funds rate to a more than two-decade high and putting on ice many companies' plans to float shares. Higher interest rates are painful for IPOs not only because they make borrowing more expensive for fledgling firms but also increase competition for investor cash.

Start of Interest-Rate Cuts Lifts Hopes for a 2025 IPO Boom

Two reasons investors are now looking a pickup in IPO activity: The Fed has been cutting interest rates since September as inflation abates, and President-elect Donald Trump’s administration  is broadly considered good for business, whether that's because it is expected to cut taxes or ease regulation.

“Deregulation will make it easier for earlier-stage companies to gain traction and grow in their specific business markets,” said Ross Carmel, a partner at IPO-focused  law firm Sichenzia Ross Ference Carmel.

IPOs by AI chip startup Cerebras Systems and Swedish payments processor Klarna, seen as likely next year, could test investor appetite for IPOs.

“If they trade well post-IPO, I expect other mature companies will follow suit and go public in 2025,” Carmel said, noting that listings by cryptocurrency-related companies are also likely to enjoy increased investor appetite under the new crypto-friendly White House.

The caveat: The private markets have surged this year and there are plenty of hot listing candidates that are easily raising money elsewhere: Elon Musk's rocket company SpaceX and Artificial intelligence (AI) giant OpenAI are just two examples.

Reddit, Astera Surged This Year But Weren't in Top 5

Here are this year’s top five IPOs by funds raised, according to Dealogic. Success stories like social media company Reddit (RDDT), whose shares have lately touched record highs, aren't in the top five.

1. Lineage (LINE)

The world's largest operator of cold-storage warehouses, raised $5.10 billion in its U.S. IPO in July, in the biggest IPO in the U.S. since British chipmaker Arm Holdings' (ARM) $5.23 billion float in September 2023 and, according to Dealogic, the largest listing by an American firm since Rivian's $13.72 billion IPO in November 2021.

2. Viking Holdings (VIK)

The cruise company raised $1.77 billion from its IPO in May. 

3. StandardAero (SARO)

The aircraft maintenance provider backed by private equity firm Carlyle went public in October and raised $1.66 billion.

4. Amer Sports (AS)

The Finnish sporting equipment and apparel company whose products include Wilson tennis rackets, raised $1.57 billion from its January IPO.

5. UL Solutions (ULS)

The applied safety science company went public in April and raised $1.09 billion.