Companies looking to tap the IPO market’s reopening on the back of listings from Arm Holdings Ltd. and Instacart Inc. still need to get their act together.

That’s a takeaway from Deloitte’s “Road to Next” report which analyzed market trends as the investment community scrutinizes deals that are going to be pricing over the coming weeks.

“It feels like there’s optimism in the market, there will be a lot of eyes on what’s happening here in September,” said Barrett Daniels, US IPO services co-leader at Deloitte & Touche LLP. “The demand is high, but the supply of debut-ready companies is still revving up. In short, the pipeline is unprepared, although it is healthy.”

As the IPO window creaks open and markets firm up, expansion-stage companies and investors will need to pivot to getting their financials lined up, the report finds. That’s a shift after just earlier this year when companies were forced to focus on risk management policies and staffing.

The first half of 2023 saw only 441 completed expansion-stage exits with an aggregate value of $31.9 billion, according to the report, a drop from 1,246 in 2022 with an aggregate value of $142.5 billion and nearly 2,000 in 2021 with a value of more than $1 trillion.

The lack of exits last year and through the start of 2023 has resulted in a backed up pipeline of expansion-stage companies, firms with late-stage venture or growth financings, that haven’t been able to exit like anticipated. There are just over 2,000 companies with an aggregate valuation of nearly $603 billion that last raised cash in funding rounds 18 to 24 months ago, according to the report, citing PitchBook data.

Just $14.2 billion has been raised via IPOs on US exchanges this year, a slide from last year and a 94% plunge from 2021’s record, data compiled by Bloomberg show. Highly-anticipated listings from semiconductor designer Arm, grocery-delivery firm Instacart and marketing and data automation provider Klaviyo Inc. could open up the market.

Arm’s initial public offering is already oversubscribed by 10 times and bankers plan to stop taking orders by Tuesday afternoon, Bloomberg News reported Monday. While Instacart and Klaviyo are hitting the road to court investors after they set pricing ranges.

This article was provided by Bloomberg News.