Why some companies are holding back IPOs and others steaming ahead

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Some massive, and we mean massive, companies are going public right now, which has market experts postulating that 2026 could be called the “year of the mega-IPO.” SpaceX, which went public on June 12 and already has a market cap of nearly $2.4 trillion, will likely be joined by fellow AI giants Anthropic and OpenAI.

Those three are in a class of their own. Executives of the other 99.9% of companies weighing an IPO or that have filed for one have far different calculations to make than Elon Musk or Sam Altman do. As Ali Ghodsi, CEO of AI data platform Databricks, recently told Bloomberg: “We will be a public company. I just think this is a terrible year to go public.”

What’s keeping companies like Databricks private, besides the expected stream of gargantuan tech IPOs? Ro Sokhi, a partner at UHY, homed in on two factors: abundant funding opportunities in the private markets and an uncertain macroeconomic environment.

“I’d say the broader reason for companies staying private longer is really that companies no longer need to be in the public markets to access capital like they once did,” Sokhi told CFO Brew. Companies may also be waiting for “a better window” to go public, he added, instead of doing it at a time of inflation, high interest rates, and tariffs.

Deregulation. The dearth of public companies has the eye of regulators like SEC Chair Paul Atkins, who observed in a December speech at the NYSE that the number of publicly listed companies in the US was down roughly 40% from the mid-1990s.

The SEC is on a mission to “make IPOs great again,” as Atkins recently stated. But it may have limited success in achieving its mission. Sokhi said “the commission is likely overestimating” the regulatory burden as a reason companies stay private. “Compliance costs are important, but they’re only one factor,” he said.

Opportunity awaits. Despite strong incentives to stay private, organizations may still have enough grounds to pursue an IPO. According to EY’s Q1 Global IPO Trends report back in April, the IPO market may have recovered to a point where “traditional benefits” of going public, such as shareholder liquidity and public currency for acquisitions, help them compete “and simply [make] sense at this stage in their lifecycle.”

And what if you’re turned off by the current macroeconomy?

PwC noted in its Q1 US Capital Markets Watch report in April that “current conditions reinforce that windows can open and close quickly.”

Cloudsmith, a platform for software supply chain security, completed a $72 million Series C fundraising round in May and recently hired Mark O’Connor as CFO. O’Connor advised Cloudsmith’s finance organization on its last three capital raises and is charged with “helping build the company’s legal and governance infrastructure,” per a news release.

O’Connor told CFO Brew that organizations should view being IPO-ready as a “mindset” and long-term vision rather than a near-term goal. (The company has not filed with the SEC to go public.)

Cloudsmith, he said, is “using an IPO as a galvanizing event, or a talk track about how we want to operate as a company in general, be it public or private. A lot of those same standards and requirements are things that we’re trying to drive in to the organization today.”

What’s the key distinction between an IPO mindset versus seeing going public as a short-term objective? According to O’Connor, it’s this: “Let’s operate like we’re going to be a public company versus start the process of trying to become a public company.”