Strong balance sheets, for example, are now a major indicator of IPO readiness.
Instead of appearing healthy due to unprecedented growth, the focus is now on reducing debt and improving cash flow management to add resilience and agility.
In addition, many businesses have consolidated supply chains and negotiated favourable terms with vendors, removing inefficiencies that may have built up over years, effectively resetting operations into a position of strength.
Businesses that have learnt from lessons like these, and made important changes, will be much more appealing to potential investors.
AI clearly has a role to play too. The way businesses harness their potential to improve the way they operate and to fuel growth is another marker of IPO readiness. Investors want to see how businesses are adapting to AI and how they are adopting it.
Our research shows that UK finance leaders are making good progress, using AI across a range of areas to cut costs and increase productivity, such as through strategic sourcing (28 per cent), AP automation (27 per cent), procurement (27 per cent) and supply chain design and planning (22 per cent).
In addition, 42 per cent of UK businesses are planning to drive growth by investing in AI technologies this year.
However, attracting investors requires more than just strong financials; it also demands transparency and good governance. Companies considering going public will already have robust end-to-end systems in place to provide clear, accurate financial disclosures, which is not only good practice but fosters trust with investors.
Positioned for success
Effective planning, strong brand presence and strategic market positioning can significantly enhance a company's appeal.
However, potential IPO candidates must be able to demonstrate how they can navigate challenges such as market volatility, which can impact stock prices and investor sentiment, and regulatory hurdles in different markets, which can be complex.
An IPO is a complicated, time-consuming process for many businesses, and one of their largest milestones. It requires meticulous preparation and a clear strategy to ensure a successful and smooth transition.
Companies that have used the waves of challenges to successfully address issues around efficiency, financial health, and strategic growth will find themselves already well-positioned to capitalise on this moment.
Ultimately, as long as this trend of cautious optimism continues, the small but encouraging move towards successful IPOs is also likely to continue, offering exciting opportunities for both companies and investors.
Paul Maguire is managing director – APAC and EMEA at Coupa
