Healthcare organizations that are burning through cash and are considering going public may resort to alternate sources of finance to maintain their operations in the face of a slowing market for initial share sales, according to industry analysts.
The COVID-19 outbreak, Russia’s conflict in Ukraine, record-high inflation, and increasing interest rates have all put pressure on public market valuations and sent stocks falling, making this the worst year for IPOs for healthcare IT businesses in 20 years.
Healthcare technology businesses contemplating share sales had caused to be excited up until this year. Low borrowing costs, pandemic relief funds, and an increase in special purpose acquisition companies, or SPACs, all contributed to the public market’s explosive growth in 2020 and 2021.
According to the market watch list Stock Analysis, 1,035 firms went public on American markets last year, breaking previous records. The public market tsunami was ridden by healthcare businesses, which raised a record-breaking $56.36 billion in 403 IPOs.
In 2022, the market’s euphoria subsided.
The number of companies that have applied to go public this year has dropped to 173. According to Renaissance Capital, healthcare businesses are also trailing behind with just 20 IPO files made as of October of this year, excluding SPACs.
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