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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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 2, 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
-
September Fed Meeting: Live Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
Ask the Editor: Questions on 529 Plan Rollovers to a Roth IRAAsk the Editor In this week's Ask the Editor Q&A, we answer four questions from readers on transferring 529 plan money to a Roth IRA.
-
September Fed Meeting: Live Updates and Commentary
The September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your WalletInterest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
I'm a Retirement Planner: These Are Three Common Tax Mistakes You Could Be Making With Your InvestmentsDon't pay more tax on your investments than you need to. You can keep more money in your pocket (or for retirement) by avoiding these three common mistakes.
-
Want to Shave 10 Hours Off Your Workweek? A Startup Expert Shows How AI Can HelpArtificial intelligence is overhauling how companies operate, freeing up entrepreneurs and their workers to skip the menial stuff and get down to business.
-
Dow Gains 617 Points as Rate Cuts Near: Stock Market TodayWednesday's economic data didn't shift Wall Street's expectations that the Fed is preparing for a rate cut at next week's meeting.
-
Hot August CPI Report Doesn't Shift the Rate-Cut Needle: What the Experts SayThe August CPI came in higher than forecast on a monthly basis, but Wall Street still expects a rate cut at next week's Fed meeting.
-
Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings, From a Financial PlannerHolding too much of one company's stock can put your financial future at risk. Here are four ways you can strategically unwind such positions without triggering a massive tax bill.
-
Beyond Banking: How Credit Unions Serve Their CommunitiesCredit unions differentiate themselves from traditional banks by operating as member-owned financial cooperatives focused on community support and service rather than shareholder profit.
