Heading into 2025, the outlook for initial public offerings (IPOs) seemed to be turning a corner. But those expectations proved overly hopeful – at least for now.
Several highly anticipated upcoming IPOs have hit the brakes. StubHub, a ticketing marketplace, has shelved its plans, while Klarna – a buy-now-pay-later platform – continues to delay its long-anticipated debut. Both were widely believed to be ready to launch their IPOs in April.
Chime, a well-known fintech player, and Hinge Health, a digital health startup, have also opted to wait to go public.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If this feels familiar, that's because it is. IPO volumes have been underwhelming for the better part of the past three years.
In 2022, just 71 companies went public, raising a mere $7.7 billion, according to Renaissance Capital, which is a provider of pre-IPO research and IPO-focused ETFs.
Activity picked up in 2023 with 150 deals totaling $29.6 billion. But that still paled in comparison to the IPO boom of 2021, which saw 397 offerings raise a staggering $142.4 billion. Even in 2020, amid pandemic uncertainty, there were 221 initial public offerings for $78.2 billion.
In 2025, only 70 offerings have raised $9.9 billion. That's barely on pace with last year.
So what's happening? And when might the IPO market get back on track?
Volatility, valuation concerns keep IPOs on ice
The U.S. IPO market remains mired in uncertainty. Much of the recent chill stems from renewed global trade tensions – specifically, President Donald Trump's "Liberation Day" tariffs that were announced on April 2nd, which sparked retaliatory moves and reignited fears of a broader trade war.
This uncertainty, coupled with a sell-off in tech stocks and increasing market volatility, has made pricing new offerings a major challenge.
"There was a pretty clear shift in IPO sentiment after the tariff announcements, which introduced a lot of uncertainty into the market," says Avery Marquez, director of investment strategies at Renaissance Capital.
"Volatility can be a strong headwind for new issuance, even when investor sentiment and risk appetite are robust. But this came while the trading environment was already somewhat weak in the wake of the mid-Q1 sell-off," Marquez adds.
Beyond tariffs, macroeconomic pressures – including inflation, higher interest rates and geopolitical instability – have spooked investors.
Given the cloudy outlook, major public companies such as Ford Motors (F), General Motors (GM), United Airlines (UAL), Mattel (MAT) and UPS (UPS) have scaled back or withdrawn their financial guidance.
It's no wonder, then, that executives at IPO-bound firms are also treading carefully.
Meanwhile, some of the most promising startups, especially in AI, are opting to stay private longer. OpenAI's $40 billion raise at a $300 billion valuation is just one example of a company flush with cash that sees little reason to brave the public markets at the moment.
"Today's founders have a far wider array of financing options available to them," said David Spreng, chairman, founder and CEO of Runway Growth Capital.
Expansion in the private credit and venture debt markets allows private companies with solid fundamentals to get the capital they need, Spreng adds. "Rather than rush toward an IPO, many late- and growth-stage businesses are choosing to stay private longer, using minimally dilutive debt to extend their runway, strengthen their businesses and preserve ownership."
Are there signs of a thaw?
Still, there are glimmers of optimism that activity in the IPO market is starting to pick back up.
The Renaissance IPO ETF (IPO) share price has recovered to levels not seen since early February, reflecting a modest revival in investor interest.
The Cboe Volatility Index (VIX), a measure of "fear" in the stock market, has also eased off recent highs, suggesting a slight calming of investors' nerves.
And new deals are happening, albeit selectively. Two insurance firms, American Integrity (AII) and Aspen Insurance (AHL) went public in early May and collectively raised more than $500 million.
And while the CoreWeave IPO – a provider of infrastructure for AI developers – underwhelmed at first, the stock has since climbed above its IPO price, a positive sign for others waiting in the wings.
Market watchers believe that when IPO activity resumes in earnest, it will center on well-established, cash-flow-positive businesses in resilient sectors – think defense and artificial intelligence (AI).
Ultimately, the IPO market tends to rebound faster than expected once conditions improve. The key will be less about chasing the next unicorn and more about rewarding strong fundamentals. Until then, companies and investors alike are playing a cautious, wait-and-see game.
Related content
- The 25 Biggest U.S. IPOs of All Time
- What Wall Street's CEOs Are Saying About Trump's Tariffs
- I Have $20,000 to Invest. What Should I Do?
- How to Survive Market Mayhem
-
7 Investing Tips for College GradsGetting a head start on investing can be intimidating for new college graduates, but doing so will pay dividends for their financial health down the road.
-
The New AI Agents Will Tackle Your To-Do ListThe Kiplinger Letter Autonomous AI agents “see” your computer screen, then complete a task, from buying a concert ticket to organizing email. This opens up a world of possibilities.
-
The Best Investing Advice for College Grads
Getting a head start on investing can be intimidating for new college graduates, but doing so will pay dividends for their financial health down the road.
-
Five Estate Planning Steps From a Wealth Adviser to Protect Your FamilyAn estate plan that covers everything from guardianship to digital assets and taxes — and is discussed openly — will give you and your family peace of mind.
-
Why Does Talking About Money Still Feel So Taboo in 2025?Financial issues affect everyone, yet many people are still afraid to talk about them. The good news is that younger generations are changing that.
-
Running Out of Money in Retirement: Nine Steps to Reduce the RiskQuit worrying about money and enjoy a carefree retirement. Sounds good, right? Well, if you follow these nine steps from a financial adviser, you could be on your way to that goal.
-
I'm a Financial Planner: Here Are Five Lesser-Known Ways to Avoid Estate TaxThe clock is ticking on the estate and gift tax provisions in the Tax Cuts and Jobs Act, so the sooner you act on removing assets from your estate, the better.
-
Is a Silent Wealth Killer Stalking Your Retirement?Poor tax planning can drain your retirement of tens or even hundreds of thousands. Stop the bleeding with a laser focus on tax efficiency.
-
Put Time on Your Side With This Simple Retirement StrategyA financial professional recommends thinking in terms of three financial stages — active years, slower-paced years and later years — assigning each one a unique bucket of investments.
-
Stock Market Today: Investors Weigh Weekend NegotiationsInvestors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.
