Wall Street had a ball in 2017 with a strong and steady run for most of the year. Several milestones were achieved by the benchmarks and investors luxuriated in the surge. In fact, the S&P 500 gained not only more than 20% but also saw its best year since 2013.  

The year also marked a bounce back for the U.S. IPO market courtesy of improving economic fundamentals and consumer sentiment. Successful IPOs poured in primarily from the biotech and technology sectors while the comeback of the Chinese issuers added to the bliss.

Going by numbers from Renaissance Capital, 160 IPOs were priced this year, marking a whopping 52.4% increase from the last. Total proceeds raised in the year swelled 88.8% from the prior year to $35.5 billion.

However, considering the broader market’s stellar returns, the performance of the IPO market was less robust than expected, primarily due to the underwhelming performance of Snap Inc. (SNAP – Free Report) and Blue Apron (APRN – Free Report) . Investors became concerned about valuation and adopted a restrained approach in investing in IPOs. Moreover, the reservations associated with the tax overhaul acted as a dampener.

Nevertheless, the outlook appears bright for next year amid expectations of an improved economy. In fact, in its December FOMC meeting, the Fed provided a better outlook, in terms of GDP growth for 2018. A positive revision in projected inflation and expectations of a “strong” job market were also part of the forecasts. In addition, higher corporate earnings and the recent tax overhaul with lower corporate taxes are likely to boost earnings higher, benefiting the stock market and driving the IPO momentum forward.

Moreover, foreign companies have a huge preference for the U.S. market when it comes to listing and this trend is expected to continue next year. Also, IPOs are likely to witness an uptick from “unicorns,” or small- and mid-sized firms that are valued at more than $1 billion. In fact, per a Reuters report, 2018 is likely to see the debut of unicorns like Airbnb and Spotify.