Investment Group Iconiq is navigating through an extended period of time without many initial public offerings (IPOs). A report states that Iconiq has closed its largest fund to date, raising $5.75 billion.
Iconiq, which has historically relied on public market offerings for value creation, is adjusting its approach in response to the significant drop in IPO activity. Over the past 11 years, the firm has facilitated approximately 30 IPOs, but there has been a notable absence of new public offerings since 2021. This shift has prompted the group to seek new avenues for growth.
Matthew Jacobson, a partner at Iconiq, indicated that the firm plans to leverage “new sources of activity” as part of its strategy. This includes focusing on mergers and acquisitions driven by strategic investors and capitalizing on the growing secondary market for startup stock.
The adjustment comes amid a broader downturn in venture capital (VC) fundraising, which fell sharply from $191 billion in 2022 to $82 billion in 2023. The trend is expected to continue into the current year, further impacting the IPO landscape.
Iconiq’s investment approach has also adapted to the rise of artificial intelligence (AI). While the firm has avoided investing in startups like OpenAI, which require substantial capital for developing core AI models, it has made targeted investments in startups that build applications using AI technology.
The IPO market’s sluggish performance is attributed not only to recent stock market turbulence but also to uncertainties surrounding economic conditions and upcoming political events. With the outcome of the November presidential election and decisions by the Federal Reserve still pending, some companies have chosen to delay their IPOs. Notable examples include WeRide, a Chinese autonomous-driving technology firm, and StubHub, which recently postponed its pre-IPO investor roadshow.
As Iconiq adapts to these challenges, its strategic shift highlights the investment group’s commitment to finding value in an evolving market landscape.
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