Fenwick’s Going Public Report: IPOs, SPACs and Direct Listings Facing Headwinds in 2022 After Record Year

By: Robert A. Freedman , Amanda L. Rose , Ran Ben-Tzur

2021 Milestones and 2022 Outlook

Following a record-breaking year for IPOs and other going-public transactions, the beginning of 2022 has presented a challenging environment. That’s largely a result of volatile market conditions due to the ongoing conflict in Ukraine, rising interest rates and the depressed performance of newly public companies that began in fall 2021.

Despite these headwinds, executives and investors in the technology and life sciences sectors are cautiously optimistic about a quick rebound—or at least one within a few years. This sentiment was based on responses to a January 2022 survey of 300 technology and life sciences decision-makers (C-suites and other senior leaders) and investors who focus on either life sciences or technology (representatives from investment banks, private equity firms, hedge funds and venture capital firms). More than 70% of survey respondents said IPO activity will bounce back in 2022 or in the next two to five years.

Fenwick’s latest report focuses on findings from the aforementioned survey that gauged these key players’ perspectives on dynamics likely to play prominent roles in shaping the 2022 IPO landscape.

Among the key findings:

  • There was strong—though not overwhelming—sentiment among respondents that the SPAC bubble has burst, although life sciences executives were least certain, with just 32% saying it had. However, whether de-SPACs will continue with any fervor is yet to be seen and likely depends on the sufficiency of high-quality targets and other economic factors, such as redemption rates, the PIPE market and dilution.
  • Technology executives and investors, as well as life sciences investors, seemed largely sanguine about how the regulatory landscape has affected IPOs since President Biden took office. Life sciences executives were more concerned, with 49% saying the regulatory shift had been negative, perhaps because of the Biden administration’s push to lower drug prices.
  • There is widespread agreement that environmental, social and governance (ESG) metrics and initiatives are increasingly important to valuations.

Downloading the full report will provide you access to a number of tables and charts that offer a graphical view of key parameters as well as a sense of recent trends.


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