The ice-breaking IPO we’ve waited for might not come from the US after all

British semiconductor giant ARM is heading back to the public markets after more than five years of private life. Even better, the company’s note announcing that it filed privately to go public — a draft F-1 listing, in other words — said that it may list in the United States.

Why get so excited about it? Well, the news means ARM could be the dam-breaking domestic IPO we’ve long been waiting for. The American tech IPO market is currently dead in the water and in need of a champion to brave the unknown, and if ARM’s offering performs well, it could encourage other companies to go public, too.

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We’ve covered this before, but to jog your memory: after a busy 2020 and 2021, American tech companies in 2022 suddenly found themselves in a changing market that generally preferred lower valuations for public tech stocks. That resulted in a nigh-complete halt of new IPOs in the U.S. from both domestic tech companies and international firms.

This perceived dearth of liquidity in the public markets is one reason why the value of startup exits in recent years has fallen so sharply. The lack of exits through IPOs, a historically critical avenue for founders, employees and investors to derive returns, meant that a host of richly valued tech startups are stuck between a receding late-stage private capital market and an indifferent, if not downright hostile, public market.

ARM could change all that and do it in style. Recall that we’ve anticipated the ARM offering could raise as much as $8 billion through its offering. In terms of priming the pump, that’s a lot of primer.

What could ARM be worth in its listing? Reuters cites some sources who expect a valuation of above $50 billion, or a little more than two OpenAIs.

If that sounds high, keep in mind that last February, Nvidia called off a $40 billion attempt to purchase ARM. Sure, valuations were a bit higher in early 2022 than they are today, but does anyone think that semiconductor chips have become less important since then?

The ice-breaking IPO we’ve waited for might not come from the US after all by Alex Wilhelm originally published on TechCrunch