After a long dry spell in the tech IPO market, Wall Street’s bankers have finally found a reason to celebrate with the recent market debuts of Reddit and Astera Labs. The New York Stock Exchange recently welcomed Reddit, Inc. to celebrate its initial public offering, with Snoo ringing the Opening Bell® to mark the occasion. This marks a significant moment for the tech industry, as these two companies are the first notable venture-backed tech companies to go public in the U.S. since Instacart and Klaviyo in September.
The bankers at Morgan Stanley emerged as the big winners in these IPOs, securing the coveted lead left spot on both deals. This is a significant achievement for the bank, especially considering the extended drought in tech IPOs over the past few years. In fact, there have only been 15 tech IPOs in total in the past two years, compared to a booming market in 2021 when 121 tech companies went public.
The success of the Reddit and Astera IPOs could signal a turning point for the IPO market, with NYSE President Lynn Martin indicating that many companies are working towards going public in the second quarter. This is welcome news for Morgan Stanley, as the bank collected around $37 million in total fees from the Astera and Reddit IPOs, providing a much-needed boost to its investment banking unit.
In my opinion, the resurgence of tech IPOs is a positive sign for the market and could potentially signal a wave of new companies going public in the near future. The success of Reddit and Astera’s IPOs demonstrates investor appetite for tech companies, and could encourage other companies to follow suit. Additionally, the involvement of high-valued customers in the IPOs through directed-share programs could help drive further interest in these offerings.
Overall, the recent uptick in tech IPO activity is a promising development for both companies and investors alike, and I look forward to seeing how this trend unfolds in the coming months. It’s exciting to see the tech industry bouncing back and I believe that this could be the start of a new wave of IPOs in the market.