John I. Sanders, Laura Sunday, and Mia Gu co authored, “U.S. IPO Trends: Small International Issuers Lead The Way”

Publications

06.2025

MVA’s John I. Sanders, Head of International Capital Markets, Laura Sunday Corporate Associate, and Mia Gu, Financial Services Associate co-authored a new article: “U.S. IPO Trends: Small International Issuers Lead The Way.”

The United States (U.S.) Initial Public Offerings (IPOs) market has traditionally been dominated by issuers with significant revenues, profits, and operating histories. Uber Technologies, Inc.’s $75 billion IPO in 2019 and Meta Platforms Inc.’s $16 billion IPO in 2012 still loom large in collective memory. However, in recent years there has been a sharp increase in IPOs by smaller companies with modest revenues, low or no profitability, and limited public floats. Among such smaller companies, foreign issuers are making up an increasingly larger number of IPO issuers.

One reason for the trend is the introduction of friendlier listing requirements by certain U.S. stock exchanges. Specifically, the Nasdaq Capital Market allows companies to list if they can satisfy modest qualitative (i.e., governance) standards and one of the three quantitative standards below: 

Requirements	Equity Standard	Market Value of Listed Securities Standard	Net Income Standard
Stockholders’ Equity	$5 million	$4 million	$4 million
Market Value of Unrestricted Publicly Held Shares	$15 million	$15 million	$5 million
Operating History	2 years	-	-
Market Value of Listed Securities	-	$50 million	-
Net Income from Continuing Operations (in the latest fiscal year or two of the last three fiscal years)	-	-	$750,000
Unrestricted Publicly Held Shares	$1 million	$1 million	$1 million
Unrestricted Round Lot Shareholders	300	300	300
Market Makers	3	3	3
Bid Price OR Closing Price	$4   $3	$4   $2	$4   $3

 

These flexible listing criteria have allowed companies to list in the U.S. with smaller offerings. For example, 99 IPOs completed in 2024 raised less than $25 million in gross proceeds, representing about 61% of all offerings in 2024. The median IPO offering size in 2024 was $10 million, unchanged from 2023, but slightly lower from the $17.6 million in 2022. Further, the median annual revenue of IPO companies in 2024 was $19.6 million, more than double the $9.0 million median in 2023, and more than quadruple the $4.7 million from 2022, although each of these figures are well below historic norms.  Moreover, the number of U.S. IPOs by foreign issuers increased from 31 in 2022, to 65 in 2023, and to 93 in 2024. Foreign issuer IPOs accounted for 56% of the U.S. market in both 2023 and 2024, representing the first two years where foreign issuer IPOs outpaced U.S. issuer IPOs.  Many of these offerings have limited institutional float or analyst coverage, yet still performed relatively well once listed on a U.S. stock exchange. The trend indicates that foreign companies are finding the path to and obligations of a U.S. listing less daunting and that U.S. investors are increasingly comfortable assessing and embracing foreign opportunities.

From our perspective, the IPO pipeline for 2025 and 2026 includes seasoned and domestic companies and a wide range of smaller foreign companies.  In recent months, we have connected with companies, from various foreign jurisdictions, with businesses focused in, but not limited to, technology, sport franchises, consumer services, fashion, food, and entertainment. Based on these interactions, we expect the recent trend of U.S. listings by smaller foreign companies to continue into the foreseeable future.

This article is a summary prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice with respect to the laws of the U.S. or any other domestic or foreign jurisdiction.

For further information about U.S. capital markets, including offerings of equity securities in the U.S. by domestic and foreign companies, contact the team at Moore & Van Allen PLLC.