The IPO market isn’t waiting for confidence, it’s waiting for a price tag

The initial public offering (IPO) market is stirring again, but the real story is not the volume of new listings coming. It is whether public markets can accurately price a generation of companies that were built, scaled and in some cases made profitable entirely in private.

Jonathan Curtis, portfolio manager at Franklin Equity, argues that the constraint is not a lack of activity. It is the absence of credible IPO valuation frameworks for the kind of companies now preparing to list.

“The key constraint is not issuance but establishing valuation frameworks that reflect how today’s companies are built and scaled,” he says.

The SpaceX catalyst: Setting a new valuation benchmark

A small group of large, complex IPOs could do something no listing has managed in this market cycle. They could set a genuine benchmark for how next-generation platforms are priced once they cross from private to public.

SpaceX is the name Curtis keeps returning to. Its listing, when it happens, will not simply be another technology IPO. It will force public markets to develop coherent IPO valuation frameworks for businesses that blend infrastructure, platform economics and long-duration opportunity in ways that existing models struggle to capture.

“When SpaceX goes public, it could mark an important inflection point: resetting how public markets value a new generation of companies that were built and scaled in private. IPOs from flagship companies like SpaceX, Anthropic and OpenAI represent something we haven’t had in this market cycle: a clear benchmark for how large, complex, next-generation platforms are priced once they transition to public markets.”

That benchmark matters beyond SpaceX itself. Once public markets establish credible IPO valuation frameworks for one of these companies. The same logic flows through to how Anthropic, OpenAI and others are priced when their time comes.

Capturing growth in private markets

The deeper shift Curtis is pointing to is structural. Over the past decade, the centre of gravity in technology investing has moved. Private markets increasingly develop, refine, and scale innovation well before companies contemplate any public listing.

Companies are reaching significant size, establishing clear business models and in some cases achieving profitability before they ever consider going public. That is a meaningful departure from prior technology cycles, where the IPO was often an early milestone rather than a late strategic choice.

“For many tech companies, access to private capital has expanded, liquidity options have improved and management teams have more flexibility around timing,” Curtis says. “As a result, the IPO is no longer an inevitable milestone but a strategic choice.”

By the time these companies list, public market investors find that much of the early growth has already been captured privately. Earnings power is often clearer before listing.

Markets are still pricing in key growth drivers, particularly in artificial intelligence (AI), in real time. Existing IPO valuation frameworks are also adjusting to a more capital-intensive, longer-duration model than public markets have traditionally been built to assess.

How next-gen listings will reshape major benchmarks

The wave of listings coming also has implications that reach beyond individual stock picking. Many of these companies will move directly from private to becoming meaningful constituents in the S&P 500, MSCI World and MSCI World Information Technology indexes. They will not enter gradually. They will arrive as core components of the broad market portfolios that most investors already hold.

“Benchmark composition should evolve alongside the innovation cycle,” Curtis says. “As emerging leaders enter major equity indexes, benchmark composition will likely shift, reshaping sector weights, growth profiles and the characteristics of technology allocations themselves.”

For investors relying on passive index exposure to capture technology innovation, that shift is worth thinking through carefully. The index you hold today will look different once these companies are inside it.

Analysing lifecycle drivers before the IPO

Curtis makes a point that cuts to the heart of how investors should be positioning themselves now. By the time a company enters an index, its role in the business ecosystem is already established, along with its growth drivers, capital intensity and competitive position.

The insight that generates real differentiation comes from understanding companies earlier, not from accessing them at the moment of listing.

“Much of the insight that informs our public market views comes from observing companies earlier in their lifecycle around how they scale, where demand is forming and how business models evolve,” he says.

The outlook: a measured transition to disciplined pricing

Curtis does not expect a flood of listings. The next phase of IPO activity is likely to be selective. Companies will need to demonstrate scalability and durability. Profitability and earnings visibility will matter more than they did in previous cycles. Valuation discipline across public markets is higher.

Rather than a broad reopening of the IPO window, Curtis expects a measured transition where companies come to market as conditions allow, private and public valuations gradually align and the overall environment remains selective.

The IPO market is not waiting for confidence to return. It is waiting for the pricing frameworks to catch up with the companies that are ready to list.