PitchBook: 159 companies went public in the US in 2019 raising $33B, a ~30% drop from 2018, as founders and investors opt for direct listings over bank-led IPOs
Founders, companies, and investors are rebelling against the investment banks — and taking matters into their own hands
Context & Ripple Effects
The 2019 IPO drought is the payoff of a retreat that started years earlier: Dealogic's 2017 data already showed new-listing volume recovering while marquee names like Uber and Airbnb stayed private, and seed investors that same year blamed a tepid IPO market for falling early-stage deal counts. What changed by 2019 is the exit mechanism itself — founders and investors aren't just delaying listings, they're routing around the banks via direct listings.
The swing cuts both ways across the corpus: when the window reopened, tech insiders netted $582.5B from US IPOs and sales in the year to September 2021, while the first half of 2025 produced just 27 VC-backed US listings, the fewest in at least a decade. 2019's 30% drop sits on the down-slope of that cycle.
First-order effects
- Investment banks lose underwriting mandates and fees as issuers choose direct listings, while the 159 companies that did go public raised $33B — roughly 30% less growth capital than their 2018 counterparts accessed through the same channel.
- Founders and existing shareholders retain more control over pricing and dilution by bypassing the traditional roadshow-and-bookbuild process.
Second-order effects
- With fewer IPO exit slots, venture-backed companies lean harder on private funding rounds — a pattern the corpus shows peaking with record $329.8B raised by US startups in 2021 — extending time-in-private-market for late-stage names.
- Rival exchanges and advisors compete to service direct listings, turning listing mechanics themselves into a product banks must reprice to defend.
Third-order effects
- If issuance keeps concentrating into fewer, larger windows — 2019's trough, 2021's surge, 2025's ten-year low of 27 VC-backed listings — the public markets become a periodic release valve rather than a steady exit path, reshaping how VC funds plan liquidity and how retail investors access growth-stage companies.
- A durable shift toward non-bank-led listings would structurally shrink the syndicate fee pool and push investment banks toward advisory and aftermarket roles instead of underwriting.
The trend: US startup exits are decoupling from bank-led IPOs, with annual listing counts swinging between feast and famine as companies alternate between direct listings, extended private stays, and waiting out closed windows.