Can 2021’s booming IPO market be repeated in 2022?

The global IPO space enjoyed a record-breaking 2021, Special Purpose Acquisition Companies (SPACs) particularly experiencing phenomenal activity. There are multiple factors behind the surge and several considerations will influence whether such vibrancy can be repeated in 2022. Before clarifying SPACs, let’s consider the numbers.

They’re certainly staggering. According to EY’s Global IPO Trends Report, 2,388 deals raised US $453.3b in proceeds globally, representing a 64% and 67% increase in volume and revenue respectively. In fact, Q4 2021 was the most active fourth quarter by volume since 2007. Against a backdrop of continuing Covid uncertainty, the market boomed as economic confidence returned and the primary drivers of its success can be distilled as follows:

  • Implementation of international Covid vaccination programmes
  • Sustained government-backed financial stimulus and support initiatives to bolster liquidity
  • A sizeable backlog of IPOs caused by Covid. This resulted in many companies being eager to launch as soon as conditions permitted

Europe, the Middle East, India and Africa (EMEIA) performed most impressively, hosting 158% more deals YoY and generating a 214% increase in income. Encouragingly post-Brexit, 110 companies came to launch on the London Stock Market in 2021 raising £14b, up from £9.3b in 2020. Once again underlining the UK’s force as a financial centre internationally, London remains the leading European IPO venue by funds raised and holds third place globally behind only the US and China.

The Americas witnessed similarly stellar IPO action, with particular focus on the Nasdaq. Nine out of ten of the largest US-based IPOs by proceeds raised were listed on the index with an astonishing 70% of the largest global IPOs by revenue also launching on the Nasdaq. The market’s exuberance has triggered comparisons with the bubble of the 2000s, a link Deloitte partner Barrett Daniels, who oversees IPO and SPAC prospects, disputes: “I don’t think the comparisons to 2000 are appropriate. The businesses today are in much better condition.”

There may not be an IPO bubble about to burst but a primary factor in the market’s dynamism is the prevalence of technology stocks being launched, the sector representing over 25% of global IPOs and a third of proceeds generated. What’s more, the proliferation of IPO launches is being fuelled by the number of SPAC startups coming to market.


Historically, around 15 Special Purpose Acquisition Companies went public every quarter; in Q3 2020 it was 82. A convenient vehicle for bringing a company to market quickly, SPACs aren’t new but their prominence has been boosted by the IPO market’s Covid-induced shutdown in 2020. Having eased the logjam their popularity soared.

Beginning as a shell company, a SPAC issues stock to raise money and becomes an initial offering which itself is then used to buy a privately owned company and turn it public. The deal done, the SPAC merges with the acquired entity and begins trading under a new identity as a public company. Typically, a two-year completion deadline is set after which the original shareholders are refunded if no acquisition has taken place.


High volume IPO activity hasn’t always concluded happily, however. One success story, Cambridge-based cyber security company Darktrace, saw its share value jump by as much as 44% in April after listing in London, boosting its market capitalisation by £0.5m to £2.2b. Deliveroo, in contrast, failed to fulfil expectations, slumping 26% on its debut to lose £2b from its opening value of £7.6b. Record-breaking transaction numbers don’t necessarily translate to strong performance.

2022’s IPO outlook

At 2021’s close, the new Covid omicron variant emerged and “the winds shifted” according to Paul Go, EY Global IPO Leader, forcing us to appreciate its potential impact on global populations and economies. This and other significant factors are likely to impede equally vigorous IPO activity in 2022:

  1. Rising inflation
  2. Continuing geopolitical tensions between the US and China
  3. Supply chain difficulties and labour shortages

Post COP 26, however, one of the greatest challenges for all companies, large and small, newly listed and long established, will be to develop and follow a rigorous ESG strategy to satisfy today’s investors who demand evidence that sustainable, responsible, transparent growth is achievable.

Scott McCubbin, EY UK IPO Leader:

“Companies looking to IPO must have an ESG story. Put simply, ESG drives growth, and firms that have a sustainable agenda now will be the winners in future.”