By mid-2025, the initial public offering market has lost the momentum it enjoyed in recent years, leaving issuers and investors alike searching for answers.
In the United States, only 84 IPOs in the U.S. were completed through mid-June 2025, down sharply from 150 in the same period of 2024. This represents the lowest half-year total since 2022, and a fraction of the 397 deals in the equivalent period of 2021. Globally, while Q1 2025 saw 291 IPOs raising $29.3 billion, that value increase masked the broader weakness in deal flow outside a handful of large transactions.
IPO proceeds in the U.S. stand at just $13 billion by mid-June 2025, the lowest level since 2022 and under 10% of the $140 billion raised by mid-2021. Full-year totals point to only 166 IPOs as of late June 2025, continuing a multiyear slump far below the record 1,035 offerings in 2021.
Despite buoyant secondary-market performance—where the S&P 500 has climbed 25% and the Nasdaq composite 35% over the past four years—primary market issuance has failed to recover, signaling a deepening risk aversion among public-market participants.
Multiple interacting factors have conspired to slow IPO activity. Companies and investors cite increased uncertainty, disappointing deal returns, and abundant private capital as primary deterrents. The table below summarizes these headwinds.
While the U.S. drifts at a multi-year low, other regions exhibit varied patterns. The Asia-Pacific markets have shown tentative signs of recovery, driven by large-cap deals in technology and consumer sectors. In EMEIA—Europe, Middle East, India, and Africa—steady issuance continues, but structural challenges remain.
Certain industries buck the trend. Defense and aerospace have seen an uptick in interest, fueled by heightened government spending and strategic partnerships. Health care companies, especially those in biotech and medical devices, continue to attract investor attention due to ongoing innovation and demographic tailwinds.
Investor surveys point to a diminished risk appetite among participants, as many prioritize profitability and stable cash flows over speculative growth. IPO candidates are increasingly leveraging AI-driven pricing models, but the ultimate decision remains tied to broader macro signals.
Key experts emphasize that a true rebound requires stabilized inflation and interest rate cuts, alongside improved geopolitical clarity. Until those conditions materialize, dealmakers will continue to proceed with caution, waiting for a clear window of opportunity.
Issuers looking to go public must demonstrate robust profitability and sustainable growth, tailoring their messaging to an audience less tolerant of high-risk valuations. Pre-IPO roadshows now emphasize cash flow metrics, clear use-of-proceeds plans, and scenarios for weathering economic slowdowns.
Investors, meanwhile, can capitalize on this lull by conducting deeper due diligence, exploring private-market opportunities, and negotiating more favorable terms. Secondary-market performance can inform primary-market decisions, but careful scrutiny of management teams and competitive moats remains paramount.
Collaboration between investment banks and issuers has intensified, with more creative structuring—such as dual-class shares and staggered lock-up periods—designed to align interests and provide more predictable trading patterns post-launch.
A lasting revival in IPO activity hinges on a reversal of the current headwinds. A sequence of interest-rate cuts, accompanied by declining inflation, could rekindle investor confidence. Similarly, any meaningful de-escalation of geopolitical risks would provide a clearer runway for public offerings.
Yet, even under improved conditions, the landscape has shifted. Private capital alternatives will remain a formidable competitor, and public-market readiness will require more rigorous preparation than ever. Companies that adapt by focusing on core fundamentals, transparent governance, and disciplined growth strategies will be best positioned to succeed when markets reopen.
The stalling of IPO activity in 2025 underscores a broader refrain: risk appetite has diminished. While pockets of opportunity persist across sectors and regions, the general caution among issuers and investors signals a new era of selectivity. Navigating this environment demands patience, precision, and an unwavering commitment to fundamentals. For those who heed these lessons, the eventual return of vibrant IPO markets may offer even greater rewards than before.
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