Europe and Romania poised for IPO growth amid global market shifts

According to the EY Global IPO Trends 2024 report, EMEIA (Europe, the Middle East, India, and Africa) led all regions in both IPO volume and proceeds, with 522 deals raising US$53.2 billion. This impressive performance underscores Europe’s growing significance in the global public markets landscape, even as other regions faced headwinds.

A Year of Mixed Results Globally

Globally, IPO volumes fell by 10%, with proceeds down by 4% year-over-year (YOY). Despite this decline, the second half of the year saw a notable recovery, with the fourth quarter outperforming previous quarters. India claimed the top spot in IPO volume for the first time, while the US led in IPO proceeds, signaling renewed investor confidence in American markets. However, the Asia-Pacific region struggled, recording its lowest IPO activity in a decade due to tightened regulations in the Chinese mainland and other market challenges.

Romania: A Rising Regional Player

Within Europe, Romania presents a compelling growth story. As a rapidly developing market, the country is increasingly attracting investor interest for its strategic position in the region and burgeoning technology sector. Romanian companies have shown a growing appetite for public listings, driven by a dynamic startup ecosystem and increased private equity and venture capital investments.

The success of IPOs in Romania aligns with broader EMEIA trends, where the technology, media, and telecommunications (TMT), industrials, and consumer sectors dominated IPO activity. With favorable monetary policies and heightened market liquidity expected in 2025, Romanian firms are well-positioned to tap into the public markets.

Private Equity and Venture Capital Driving Growth

A key driver of IPO activity globally and in Europe has been the involvement of private equity (PE) and venture capital (VC) firms. In 2024, PE- and VC-backed companies generated 46% of total global IPO proceeds. Out of the 20 mega IPOs this year, 12 were PE-backed—a significant increase from the previous year. This trend is likely to continue in Romania, where PE and VC firms are actively investing in high-growth sectors, including technology and renewable energy.

Technology and Innovation Leading the Charge

The global interest in technology and innovation has not bypassed Romania. The country’s tech sector, bolstered by a strong talent pool and increasing digital transformation initiatives, is expected to play a pivotal role in future IPO activity. AI-driven companies, in particular, have seen heightened investor interest, reflecting a broader global trend. With more than 60 AI companies currently in the process of IPO registration globally, Romanian tech firms may find opportunities to attract capital and scale their operations.

Navigating Geopolitical and Economic Challenges

While Europe’s IPO market showed resilience in 2024, challenges remain. Geopolitical tensions, shifting fiscal policies, and supply chain disruptions continue to pose risks. However, the region’s strategic focus on environmental, social, and governance (ESG) initiatives and digital transformation offers a pathway for sustainable growth.

Romania, in particular, stands to benefit from increased regional collaboration and strategic investments. The country's integration into European financial markets and alignment with ESG priorities could further bolster investor confidence.

Outlook for 2025: A Cautiously Optimistic Path

Looking ahead, the global IPO market is set for a strong performance in 2025, supported by a cautiously optimistic economic environment and favorable market conditions. In Europe and Romania, the pipeline for public listings appears robust, with companies across various sectors preparing to capture opportunities presented by renewed market momentum.

George Chan, EY Global IPO Leader, highlights the transformative potential of IPOs: “Business transformation requires funding, and an IPO offers a powerful avenue to raise the capital needed to drive growth and innovation. After a period of slower activity, the global IPO market is regaining its momentum, supported by more favorable market conditions. The outlook for 2025 appears increasingly optimistic, with a strong pipeline of companies across sectors looking to capture the opportunities presented by this renewed market strength.”

As Romania continues to evolve as a key player in the European IPO landscape, collaboration between investors, regulators, and companies will be essential to unlock the full potential of the market. With the right strategies and market conditions, Romania is well-positioned to be a standout performer in the next phase of global IPO growth.