CAPITAL MARKETS

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This year’s IPO market will be remembered for the rise of mega offerings like SpaceX’s $75 billion deal, which is expected to get bumped by the super-gigantic pending $100 billion IPO of Anthropic. But this year could also go down as the time when software lost its IPO dominance.

Just one software company, Liftoff Mobile, has listed this year, according to Renaissance Capital, a provider of IPO research and IPO-focused ETFs. Liftoff, an ad tech firm, raised $437 million in June, downsized from initial plans for $711 million.

“Usually, software is a pretty reliable source of deal activity in a healthy IPO market,” Matt Kennedy, Renaissance’s senior IPO strategist, told CFO Brew.

Last year, nine sizable software IPOs took place, according to Renaissance Capital, including Figma, which rose 250% on its first trading day. Eight software businesses went public in 2024.

This year, the so-called SaaS-pocalypse wiped out $2 trillion in software market value in February, which “reset a lot of valuations and expectations,” Kennedy said. AI infrastructure emerged as one of the most popular sectors, producing the $26.5 billion IPO from SK Hynix and Cerebras Systems’ $5.5 billion offering.

The IPO market’s new theme is killing the old.—LB

      

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ACCOUNTING

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Internal audit professionals aren’t happy with the NYSE’s proposal to loosen internal audit requirements for newly public companies.

The exchange on July 31 informed the SEC that it wanted to roll back its requirement that newly public companies establish an internal audit function within one year, and proposed making the requirement five years instead. The comment period for the proposal ended September 8.

CFO Brew examined the more than 100 comment letters posted on the SEC website and found that the vast majority either expressed concerns with the proposal or stated outright opposition to it. This includes a joint letter from industry organizations including, among others, the Institute of Internal Auditors (IIA), Association of Certified Fraud Examiners (ACFE), the risk-management society RIMS, and the Interfaith Center on Corporate Responsibility.

The letter reads, in part: “We come to this issue from different seats…but we share one conviction: independent, ongoing assurance over a public company’s risks and internal controls is foundational, and the proposal would defer it for half a decade.

As the NYSE pointed out, Nasdaq has no internal-audit function requirement.—AZ

      

THE ECONOMY

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Everyone remembers their first…rate hike.

On Wednesday, the Federal Reserve’s Open Market Committee (FOMC) raised interest rates for the first time since 2023 and the first time thus far in Chair Kevin Warsh’s three-plus months’ tenure.

The quarter of a percentage point hike brings the Fed’s benchmark rate into a range of 3.75% to 4%. The decision was unanimous among all 12 Federal Open Market Committee members.

“The plain fact is that inflation is too high and has been for too long,” Warsh said in a press conference after the announcement. “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Today, the FOMC decided that this standard has not been satisfied.”

In addition to inflation, Warsh said a strong labor market and the conflict in the Middle East, which has fueled high oil prices, also swayed the committee’s decision. Inflation has hovered above the Fed’s 2% target for over five years.

But what does the Fed do from here?—NP

      

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market forces

Francis Scialabba

Today’s top finance reads.

Stat: 15%. That’s the percentage increase in capital allocated (totaling $2.3 trillion) to the energy sector by banks last year compared with 2024 “against a backdrop of rising demand” from sources including AI data centers, EVs, and cooling systems. (Bloomberg)

Quote: “One of finance’s roles is to provide clarity. A company can have a lot of great ideas, but we should identify the top three priorities and invest behind them. If an idea supports one of the strategic pillars we are pursuing, we will invest in it. If it sits outside those priorities, we will have a conversation about it.”—Andy Kellogg, CFO of Culligan (CFO)

Read: Interest rate hikes will make what’s already been a bad year for PE “a lot worse.” (the Wall Street Journal)

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