From the best of times to the worst: In 2022, the market for initial public offerings fell off a cliff.

Investors, faced with high inflation and rising interest rates, have abandoned high-growth stocks and turned to safer, more profitable alternatives.

The decline was stunning given the record level of revenue raised through the public markets just a year earlier. US publicly traded companies to raise more than $155 billion in 2021 through IPOs to EY and Dealogic data. In the first half of 2022, they raised only $4.8 billion.

“Investors are really risk-averse right now, and that’s what’s really driving the lack of activity that we’re seeing,” Rachel Gehring, head of IPOs at EY Americas, told CNBC. “They are looking for companies that are more focused on growth and profitability, rather than growth at any cost, which we saw in 2021.”

Goering said part of the disruption in the IPO pipeline was caused by the terrible performance of companies going public in 2021. The downturn also hit the market for special purpose acquisition companies, also known as SPACs, which were used as an alternative vehicle for private companies looking to go public.

“There are hundreds and hundreds of SPACs that are already public and looking for a merger partner, and any new IPO SPAC will compete with those hundreds of other SPACs,” said Jay Ritter, an IPO expert and professor at the University of Florida. CNBC interview. “So it doesn’t make sense for a SPAC to go public now rather than wait a year until all this competition is gone.”

Watch the video above to see how the IPO market went from boom to bust in 2022 and whether experts predict a rebound in 2023.

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