The U.S. initial public offering (IPO) market is poised for a resurgence with several high-profile companies including Chime Financial, Stripe, and Reddit set to make their market debut by the end of this year.
Chime Financial, an online banking service catering to younger demographics, had initially planned to go public last year. Due to unfavorable market conditions, the company decided to delay its IPO. The firm, once projected to have a valuation near $25 billion last year, is now slated for a market entry later this year.
Online payments processing firm Stripe began its journey towards going public in 2021 and is now expected to debut on the market this year. As of March 15, 2023, the company's projected valuation stands at an impressive $50 billion.
Social media platform Reddit has also maintained its IPO plans amidst turbulence in the tech IPO landscape. The company secured a valuation of $10 billion last August following an investment round that garnered over $400 million from Fidelity and other investors.
On the macroeconomic front, indicators suggest improving conditions that could further stimulate IPO activities. Inflation appears to have peaked and interest rate hikes seem to be nearing their end. The Federal Reserve maintained interest rates at a 22-year high between 5.25% and 5.5% during the most recent Federal Open Market Committee (FOMC) meeting, but hinted at a possibility of one more rate increase this year.
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