Strong market debuts raise questions over cautious IPO pricing by Wall St banks
However, some fintech brokerages such as Robinhood and SoFi Technologies are tapping retail demand by offering access to IPO shares in select companies.
"The IPO market's basically been closed for three years. So if you're an investment banker, you don't know what the demand is," said Tomasz Tunguz, founder of venture capital firm Theory Ventures.
As listings rise, startups preparing to go public may push back against conservative pricing, Tunguz said.
The fall IPO window is shaping up to be one of the busiest in years, with fintech giant Klarna, crypto exchange Gemini and medtech firm Medline leading the race to capitalize on resurgent investor demand before the end of the year.
The Renaissance IPO Index, which tracks the performance of some of the largest newly listed stocks, has risen 15% in 2025, outpacing the benchmark S&P 500.
NICHE ALTERNATIVES
For years, critics of the IPO process have promoted direct listings — where issuers go public by putting shares directly on to a stock exchange without the help of underwriters — to avoid misjudging demand.
This route was taken by streaming platform Spotify and crypto exchange Coinbase in recent years.
But it has gained limited traction in the U.S. as companies prefer the stability of the traditional IPO roadshow and the trading support provided by underwriters.
"The traditional IPO path is just more tried and tested, and more people understand it than a direct listing," said Mike Bellin, IPO services leader at PwC U.S.
Special purpose acquisition companies or SPACs, where a listed shell merges with a private firm, were touted as an alternative to traditional IPOs, but went through a boom-and-bust cycle between 2020 and 2022.
Though the route is regaining ground this year, mainly among high-growth crypto and tech stocks, it remains constrained by regulatory hurdles, redemption risks and stock volatility.
"If I were IPO-ing my company right now, I probably would do it the way that people have been doing it, even if I know there's a mispricing risk," said Maria Palma, general partner at Freestyle Capital.
(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Michelle Price and Arun Koyyur)
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