Software sell-off disrupts February IPOs

If you thought 2026 was going to be the year IPOs made their comeback, February said, “hold my beer.”

In January, the IPO market was buzzing with expectations, but after a February marked by postponed IPOs, market volatility, and a notable software stock sell-off, 2026 is looking less rosy for IPOs.

“January 30, things did look pretty good,” Matthew Kennedy, senior IPO market strategist at Renaissance Capital, told CFO Brew. “I think we were saying this was going to be the 2026 IPO market’s first big test. And we were optimistic, but the test results were not as good as we were hoping for.”

Last month, things were looking up for IPOs after a slow 2025. EquipmentShare went public at a $6.7 billion valuation, and crypto company BitGo debuted at a $2.59 billion valuation. But then, BitGo’s share price declined 19% just two days after its initial offering on January 21.

Market conditions. The post-IPO performance of some of the other IPOs from late January and early February was a “big disappointment,” according to Kennedy. As the month wore on, the stock price began to sag for newly public Brazilian banking app PicPay. And later in the month, AGI, another banking app out of the South American country, had to cut its sale price to get its IPO over the line.

On February 12, Clear Street Group, a cloud brokerage platform, postponed its IPO and cut its target valuation, later formally withdrawing. Earlier this month, Liftoff Mobile also decided to postpone its IPO a few hours before it was set to open, withdrawing it altogether two weeks later. Both Liftoff and Clear Street cited market conditions as the reason for the postponements. Ultimately, Liftoff resubmitted for an IPO hours after officially withdrawing.

“When a company says ‘market conditions,’ often, I am skeptical,” Kennedy said. “But in this case, I think it’s true.”

The software sell-off in mid-February was fed by concerns that AI was devaluing software companies. Wall Street saw a threat from Anthropic’s Claude Cowork; as Kennedy told us, software companies “really need to make a convincing case that this is not just something that a startup with a few developers and Claude can replicate.”

In his regular Sunday email, Renaissance Capital CEO and founder Bill Smith said “There’s even a silver lining to the recent software sell-off: Public investors are clearly better off digesting the risk of AI disruption before the coming IPO boom than after. That risk will likely shake out in the valuation, and so the majority of anticipated 2026 tech IPOs should still be on the table.”

The mostly highly anticipated IPOs this year are the expected blockbuster offerings of the AI and tech giants: Anthropic, OpenAI, and SpaceX. But Kennedy’s thinking has shifted.

He expects to see IPOs return for “companies in biotech, industrials, consumer—consumer kind of fell off the map last year because of the tariffs. Now, companies have been able to get their supply chains in a pretty predictable, presentable fashion.”

“2026 was anticipated to be the year of the AI IPO,” he said. “Now it’s looking like the year of the AI-resistant IPO.”