Goldman Sachs Group Inc. is helming a string of initial public offerings next month that could help pry open the business after a near two-year lull. Those IPOs, including ones from chip designer Arm Holdings Ltd. and grocery-delivery company Instacart, may also spur renewed interest in other parts of investment banking.
Just $14.4 billion has been raised through IPOs on US exchanges this year, with the bulk of activity coming from corporate spinoffs, penny stocks and blank-check firms, according to data compiled by Bloomberg. That compares with $242 billion through August in 2021, underscoring the abruptness with which dealmaking went from feast to famine mode.
“Everyone is definitely keeping a close eye on the deals,” said Rachel Gerring, who advises IPO-bound companies at consulting firm EY. “There are a lot of companies on the sidelines waiting, with a wait-and-see stance, particularly to see what the market reception is.”
The deals could also lift fortunes for bankers at Goldman, where a dearth of dealmaking has hit the firm at a time when other units have misfired, cutting into profits.
And for the equity-capital markets team in particular, led by David Ludwig, the next few weeks provide a shot at redemption. The team had tried to raise funds for Silicon Valley Bank in March — a transaction that failed, pushing the US regional banking sector into turmoil and prompting finger-pointing by competitors.
Almost six months later, those same rivals are hoping that Goldman can pave the way for a capital-markets renaissance.
The Wall Street giant is one of the key banks behind the highly anticipated IPO of SoftBank Group Corp.’s Arm, which is expected to raise several billion dollars and would mark the biggest US offering since November 2021, delivering a much-needed boost to the moribund market.
Dan Dees, one of Goldman’s investment bank co-heads, has built close ties over the years to SoftBank and its chief Masayoshi Son. Goldman is one of the four lead banks on the deal for Arm, which is breaking with convention and not electing to name a lead left, a coveted bragging right in banking circles.
Goldman is also leading the offerings of marketing-tech firm Klaviyo Inc. and footwear maker Birkenstock. Those companies are also expected to find a place among the year’s largest US IPOs.
“These are important deals broadly to the whole IPO market, but to the tech sector specifically as well,” said Gerring, who is the Americas IPO leader at EY. “The tech sector has really been the focus of the valuation resets that we’ve been experiencing.”
Only one deal has raised more than $1 billion on US exchanges this year: Johnson & Johnson’s consumer-health unit Kenvue Inc., which attracted $4.4 billion.
“The first round of these tech companies that come out have the responsibility for the rest,” said Arjun Kapur, founder of Forecast Labs, a venture group within Comcast Corp. The firms need “to make sure that they go out and price their IPO appropriately and deliver on their promises.”
