It's go-go time for the IPO market, a signal of the new reality shaking up the transition from private to public.

This week is set to see a pair of closely watched venture-backed companies make their debuts on the New York Stock Exchange. Data-mining specialist Palantir Technologies and project management platform Asana are both testing out the still-novel direct-listing process. 

It's tempting to zero in on these two deals as big tests of the viability of B2B software companies doing a direct listing, or even as bellwether gauges of the broader health of the IPO market.

Those topics deserve attention, but a larger story is unfolding here at the close of one of the hottest quarters on record for new stocks. Deals like Asana and Palantir speak to a whole new set of rules and characters driving all the heat and light surrounding the IPO market. 

After several years of staying private longer, more tech companies finally see an opening to go public or safely test the IPO waters. 

It's a sign of how much has changed as a result of regulatory and market trends like the ability to file confidential IPO registration papers and an explosion of high-growth cloud-based software upstarts. More recent factors reshaping the process include the rise of blank-check acquisition vehicles and the fact that founders now have some say in how Wall Street banks allocate shares to favored clients.

Even a legacy of the pandemic could herald more dealmaking. Company executives, having curtailed travel, now resort to virtual roadshows to market themselves to institutional investors instead of flying around the country—a time- and money-saving trend that is expected to become the new standard.

Technology itself has been the heartbeat of the IPO market. For the past couple years cloud-based business software companies have dominated the fundraising in the new-issue market, a trend punctuated earlier this month when Silicon Valley data-warehousing provider Snowflake flew out of the gate to notch a market value topping $70 billion.

So far, direct listings have been a small part of the story. 

Palantir, also catering to business customers, will hit the market riding that wave with an initial valuation estimated at about $22 billion.

Regardless of how the public market greets Asana and Palantir, both companies are joining a long parade of technology companies breaking a logjam of overdue deals in the IPO pipeline. 

"If they're not successful, which is highly unlikely, it wouldn't impact the basic trend we have of a robust IPO market," said Sandy Miller, a venture capital investor at IVP. The late-stage Silicon Valley firm has backed hundreds of software companies like Slack, which went public with a direct listing last year, and Sumo Logic, which went out earlier this month in a conventional IPO valued at more than $2 billion. 

Scores of other contenders in the tech industry are waiting in the wings to go public, and many are business-focused software providers that private investors have valued at $10 billion or more. Topping that list are payments platform Stripe, which commands a valuation of $36 billion, mobile-fintech specialist Chime, at $14.5 billion, and UIPath, an AI-automation company that was valued in July at more than $10 billion by IVP and other investors, according to PitchBook data.

Among consumer-focused tech companies in the $10 billion-plus ranks are household names ranging from rentals platform Airbnb and gaming giant Epic Games to delivery powerhouses like DoorDash and Instacart.

The latest twist shaking up the IPO market has been the boom in blank-check shell companies going public as a platform for pulling off reverse mergers. High-profile companies like Silicon Valley home flipper Opendoor and electric vehicle maker Nikola teamed up with special-purpose acquisition companies to find a way onto the public market.

Look for SPAC mania, at least for the foreseeable future, along with a host of other novelties in the IPO scene to accelerate the rate of private companies finding their way into the public realm.

Featured image of Palantir co-founder Peter Thiel via Stephanie Keith/Getty Images

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