Despite major flops from some of the tech world’s biggest unicorn IPOs this year, including the lackluster performance of ride hailing companies Uber Technologies Inc. (UBER) and Lyft Inc. (LYFT), tech IPOs are up roughly 30% in 2019 on average, per Dealogic. Successful debuts of companies including Crowdstrike Holdings Inc. (CRWD), Fiverr InternationalLtd. (FVRR), and Chevy Inc. (CHWY) have helped to restore faith in an IPO market on track for its biggest dollar volume year since 2000, as outlined by The Wall Street Journal.

“The last few weeks have provided proof points that there is no overhang from the deals that have struggled,” said Justin Smolkin, head of technology, media and telecommunications equity capital markets at Deutsche Bank AG . “Investors are very receptive to the IPO market and are being rewarded for their participation.” 

Demand for IPOs Balloons

Investors have sent shares of these new issues rising as some more traditional tech stars struggle with volatility. While the broader market and the tech sector in particular have staged a strong comeback in 2019, companies like Alphabet Inc. (GOOGL) remain further from highs due to headwinds including trade war concerns and the prospect of heightened government regulation.

Equity investors eagerly snapped up shares of thee three companies that went public last week—cybersecurity firm CrowdStrike, online pet-supply retailer Chewy and freelance-services marketplace Fiverr International—each of which has risen 50%. While 2019’s tech IPOs have returned 30% YTD, ten out of the 26 have gained a whopping 50% or more, compared to the Nasdaq Composite’s 18% increase.

This year’s batch of high flying tech stars spans across sectors, including niche companies like vegan meat pioneer Beyond Meat Inc. (BYND), which has seen its stock fly from an initial IPO price of $25 to near $170 on Wednesday.

This outperformance spells good news for upcoming debuts, indicating that investors are still eager to buy shares of high growth startups.

This week, cloud-driven enterprise software company Slack Technologies Inc. (WORK) is expected to garner a valuation upwards of $18 billion in its direct listing, marking a more than 100% increase from its latest private valuation in 2018.

Demand for these new issues is likely to stay strong as the supply of public companies remains limited, notes the Journal. While this year has seen a resurgence of the IPO market, the number of public companies in the U.S. is still at a low, as companies choose to wait longer to go public and big companies gobble up smaller competitors.

For example, a handful of deals have closed over the past month alone, including Salesforce.com Inc.’s (CRM) acquisition of enterprise software company Tableau Software Inc. for more than $15 billion, as well as Alphabet’s purchase of big data company Looker for $2.6 billion. Meanwhile, Dealogic indicates that tech companies have sold off just 16% of their companies on average in 2019, compared to the historical average of 26% since 1995.

Lack of profitability doesn’t seem to be a huge factor for investors, either, although it has been a focal point for bears criticizing loss-ridden companies like Uber and Lyft.

“Investors value growth, and they’re being less differentiating between profitable growth and unprofitable growth,” said Bimal Shah, portfolio manager at Thornburg Investment Management.

Looking Ahead

To be sure, the recent hot streak in the IPO space does not guarantee that this year will ultimately set a record, or that shares of these newly public companies will continue to rise. The next major test will be the offerings of debt and loss-risen The We Co, parent company of We Work co-working spaces, and also Slack, which faces slowing revenue growth. Other potential headwinds, including an economic downturn or a sudden market decline could severely depress the tech IPO space.