As people grow weary of the recession – stop fretting about their financial well-being and start spending more money again – might there not be IPO fatigue?

Recent data from Morgan Stanley’s equity capital markets team suggests that may be the case. And while self-serving, there are good reasons to think they’re right.

Several venture capitalist-funded technology companies that were set to go public last year hit the brakes when the Federal Reserve raised interest rates and riskier sectors fell out of favor.

The market for initial public offerings came to a near standstill, and only two technology companies went public on U.S. exchanges in the entire year.

Despite a 16% rise in the technology-heavy Nasdaq Composite Index this year, corporate leaders are still nervous about the way forward. So far in 2023, only two U.S.-listed tech companies have gone public, so hotly anticipated names like Reddit and Instacart are still in the pipeline, where they’ve been sitting since 2021.

Historical precedent shows that droughts only last so long. Even last year, the worst year for tech IPOs since 2001, the window remained closed for only 272 days.

After the financial crisis, the market went 237 days without an IPO. Other recent closures, in 2016 and 2020 after the Covid-19 outbreak, were shorter.

The current drought has lasted 62 days. Even if the previous record were beaten by one day, the next IPO wouldn’t occur until early November.

Sentiment toward technology companies has slowly improved, as has the Nasdaq. In February, Instacart’s internal valuation was up 18% from last December.

According to The Information, that’s probably down 70% from two years ago, but it’s headed in the right direction. Marketing automation company Klaviyo has already hired Goldman Sachs for an IPO later this year, The Wall Street Journal reported last week.

Companies are in desperate need of cash, and not just because they’re burning it. Stripe’s founders, Patrick and John Collison, recently turned to retail investors to appease employees who had been promised a payout despite a 50 percent share price discount.

ECM bankers, who are paid only if a deal goes through, also did a lot of work for free. The market for IPOs in the technology sector could soon be opened up, if only because everyone is sick of being broke.