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As 2025 progresses, the initial promise of a renaissance in public market offerings has given way to a sobering assessment: IPO activity has stalled amid a retreat in investor enthusiasm. Companies that had lined up to debut on stock exchanges are now weighing the costs and risks more carefully, mindful that market conditions have shifted dramatically since the heady days of 2021.
The mid-June figures tell a stark story. US listings have plunged to just 84 for the first half of the year, down from 150 during the same period in 2024 and far below the record-setting 397 in 2021. Proceeds have dwindled to a mere $13 billion, representing the lowest since 2022 mid-year and underlining the fragility of confidence among equity investors.
In the United States, the count of initial public offerings (IPOs) slid from 150 in early 2024 to 84 by mid-June 2025. Total proceeds over that same span were a modest $13 billion, barely reaching 10% of the $140 billion raised in the first half of 2021. While Q1 2025 did see a rebound to 75 IPOs—up from 43 in Q1 2024—the overall tally remains a fraction of the peak years.
Global figures echo this ambivalence. January 2025 witnessed 117 IPOs, a slight uptick from 102 deals in January 2024, with aggregate values rising from $11.6 billion to $13.9 billion. Yet through May, only 25 traditional US IPOs had raised over $11 billion, compared with 28 offerings producing $12.7 billion in the same period of 2024.
The retreat in IPO activity is rooted in a combination of economic and geopolitical factors. Many investors are now wary of persistent macroeconomic headwinds across markets that have dampened returns. After a brief period of optimism fueled by predictions of rate cuts, markets have been jolted by renewed inflationary pressures and uncertainties.
In addition, policy shifts and global tensions have contributed to widespread policy-driven volatility in markets. Companies are delaying their public debuts until they can secure more predictable valuations in a calmer climate.
While overall activity has slowed, certain sectors have shown resilience. Health care listings led Q1 2025 in the US, driven by strong investor interest in biotech and medical services companies. Meanwhile, the technology sector has experienced sharp falls in tech IPOs, with global offerings down 47% in volume and 75% in value year-on-year as of 2023.
Emerging themes such as artificial intelligence, cybersecurity, and fintech have seen selective resurgences, with a handful of successful listings spurring cautious optimism among niche investors. However, broad-based enthusiasm has yet to return.
Performance of recent large IPOs has been lackluster. On average, offerings above $100 million have posted a -1% return from their offer price, prompting issuers to reconsider timing and valuation strategies. Despite this, there remains a latent IPO demand remains strong among companies that had been preparing to go public during the 2021–2022 peak.
Venture capital exits in 2024 were predominantly at Series A and B levels, delivering insufficient exit multiples to satisfy many investors. As a result, many firms are choosing to remain private longer or explore alternative liquidity paths such as direct listings and SPAC mergers.
Despite recent setbacks, there is a prevailing sense of cautious optimism. Analysts point to potential rate cuts later in 2025, improving corporate earnings, and regulatory clarity as catalysts for a rebound. Yet uncertain interest rate outlook and fresh macro threats remain overhanging concerns.
For startup founders and board members, the current environment is a test of discipline. Companies that focus on strong balance sheets, clear growth pathways, and robust governance will be best positioned to take advantage of any upturn. Institutions and investors, meanwhile, are reminded of the critical importance of timing and valuation discipline when considering public offerings.
Ultimately, the IPO market’s near-term trajectory hinges on the interplay between economic policies and investor psychology. A sustained recovery will require both cooler inflation and restored confidence in public equities. Until then, the market for fresh listings is likely to remain subdued.
In light of current dynamics, companies planning IPOs should prioritize internal readiness over immediate market windows. Three key considerations can help issuers navigate this challenging landscape:
By adopting a measured approach, companies can maintain optionality without rushing to market prematurely. This patience will be rewarded if financial conditions stabilize and investor appetites recover.
The current pause in IPO activity may seem like a setback, but it also presents an opportunity for introspection and strengthening. Firms that emerge from this period with solid fundamentals and nimble strategies will be well-equipped to take flight when the next window opens.
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