The initial public offerings (IPOs) market started gaining momentum in 2024. There were 150 IPOs in the U.S. market in 2024, raising $29.6 billion, per a Renaissance Capital article. However, in spite of a more than 50% increase in proceeds compared to 2023, deal flow was still tepid by historical standards, the article indicated.

However, the year 2025 has shown signs of a rebound. The market is now set to recommence in the fall as the initial phase of the year was marred by tariff-led worries, per another Renaissance Capital article.

Best Deal Activities Since 2021?

Year to date, IPOs have raised $23 billion, in line with this point last year, per Renaissance Capital. As the market approaches fall, Renaissance expects the quickest clip of deal activity since 2021, as more companies speed up listing plans.

Goldman Sachs also echoed the same view. Goldman is likely to witness its busiest week for initial public offerings since July 2021, its CEO David Solomon said in a CNBC interview on Wednesday, reported Reuters, as quoted on Yahoo Finance.

Meanwhile, Renaissance Capital noted that while attention is on high-growth and most-talked-about areas like tech, fintech, AI and crypto, the IPO pipeline also includes biotechs, restaurants, banks and energy companies.

Renaissance Capital went on to forecast that 40 to 60 U.S. IPOs could raise roughly $10 billion between now and year-end. This would take the 2025 tally to 190 IPOs, raising about $35 billion.

Reasons for the Rebound

A charged-up equity market and the likelihood of Fed rate cuts are probably the factors behind the revival. A strong stock market normally indicates investors’ bullish view and increases the chances of a company intending to go public getting a higher valuation.

Cheaper capital (meaning if the Fed continues to cut rates) encourages investors to explore other high-growth avenues. Equity valuations are also likely to rise, as the cost of capital decreases in a low-rate environment, which in turn boosts IPO pricing.

Moreover, decent economic growth also favors an IPO or the corporate environment. Then there’s the AI boom. Any name associated with tech, crypto and AI is likely to see almost sure-shot success in their IPOs, thus enabling them to raise enough funds to finance their high-growth future tech initiatives.

Against this backdrop, below we highlight a couple of IPO-based exchange-traded funds (ETFs) in detail.

ETFs in Focus

Renaissance IPO ETF (IPO Quick QuoteIPO - Free Report)

The Renaissance IPO Index looks to offer exposure to 80% of the total market capitalization of newly listed companies that have gone public within the last three years and meet certain criteria.

The fund charges 60 bps in fees. Reddit (15.20%), Astera Labs (15.07%) and Arm Holdings (8.67%) are the top three holdings of the fund. The IPO ETF has gained 18% this year.

First Trust US Equity Opportunities ETF (FPX Quick QuoteFPX - Free Report)

The underlying IPOX-100 U.S. Index is a modified value-weighted price index measuring the performance of the top 100 companies ranked quarterly by market capitalization in the IPOX Composite U.S. Index. The IPOX Composite U.S. Index measures the average performance of U.S. IPOs during their first 1,000 trading days.

The fund charges 61 bps in fees. GE Vernova (10.64%), Palantir (8.83%) and Applovin (6.84%) are the top three holdings of the fund. The FPX ETF has advanced about 30% so far this year.