Window Reopens, But Expect A Convoy, Not A Stampede

The pace of U.S. venture-backed IPOs so far this year has not exactly been robust. However, there has been a marked uptick in public offerings compared to recent years. And, for those who have made their debuts, the market reception has been exceptionally positive overall.

Some of the more successful public debuts we’ve seen include design software provider Figma’s blockbuster IPO, which set an initial valuation for the company of just over $19 billion. As of mid-August, Figma’s market cap hovered at nearly $34 billion. There was also Circle Internet Group. The New York-based stablecoin provider, with a market cap of over $33 billion, has seen the value of its shares rise more than 4x following its early June IPO.

Isabelle Freidheim, founder and managing partner of global investment platform Athena Capital, is not surprised by the rebound in IPOs this year. In her view, it was inevitable.

“It is the norm to see four- to five-year cycles in the capital markets,” she told Crunchbase News. “What we’re seeing in 2025 is the strongest U.S. IPO market since 2021, and it’s overdue. For the past four years, companies were effectively trapped in the private markets, and investors were starved of new opportunities.”

What is striking to Freidheim — who has served on multiple NYSE and Nasdaq boards — is not just the quantity of deals, but the quality. Companies going public today are “fundamentally stronger” than the last cycle, she said.

“Most have cut costs, proven unit economics, and learned the hard lessons of the ‘growth at any price’ era, especially in tech,” she said.

Another important difference from the last IPO boom, added Freidheim, is that “performance has been rational” with “more measured debuts.”

“In some ways, the restraint is the most encouraging signal,” she said. “It suggests the IPO window isn’t just reopening, it’s maturing.”

Lindsey S. Mignano, co-founder of SSM Law, agrees that 2025 so far marks a notable U.S. IPO comeback, powered by strong openings. But that has all been tempered by “mixed follow-on performance and smaller deal sizes,” she added.

The next wave

So what’s ahead for the remaining few months of 2025?

Mignano predicts there will be continued renewed momentum in IPOs, especially “as markets stabilized after tariff volatility earlier this year.”

Devon Kirk, general partner and co-head of late-stage investment platform Portage Capital Solutions, agrees that we should expect to see growing confidence, a strong ecosystem and more IPOs.

“For example, pre-IPO investors aren’t demanding as big a discount as they were six months ago because the perceived IPO risk is decreasing,” she said. However, she acknowledges that there are several macro risks “that could quickly derail the markets.”

“But I think recent market experience has taught companies to take advantage of opportunities when they present themselves, so we should expect they will dance as long as the music is playing,” Kirk said.

In Freidheim’s view, the strongest companies so far in 2025 with the clearest investor demand “went first,” setting the stage for the next wave of IPOs.

“We may see a bit of delay in the second half, but the direction of travel is intact,” she said.

However, she doesn’t expect we’ll see a flood of IPOs in the remainder of 2025.

“Think of 2025 less as a stampede and more as a convoy: flagships go first, mid-caps follow in formation,” she said. “And that cadence is exactly what a healthy, sustainable IPO market looks like.”

AI factor

While artificial intelligence companies have been by far the largest recipients of venture capital funding in 2024 and 2025, it’s still too early to see them take to the public markets.

Views are mixed as to when we might start seeing AI companies actually start to IPO.

Kirk believes that many companies looking to IPO will try to position themselves as net winners from AI adoption, but “ investors will need to discern whether that’s really the case.”

Mignano points out that historically, venture-backed tech startups take 10 to 15 years from founding to IPO. However, she thinks that if early-stage AI companies can scale faster thanks to cloud distribution, automation and capital investment — and if the IPOs for late-stage AI unicorns already scaling (such as CoreWeave, Databricks, Cerebras) perform well this year — that “could increase investor interest and shorten the traditional IPO runway to less than 10 years for today’s early-stage AI startups.”

If that is the case, the AI early-stage companies born in 2023 through 2025 could IPO as early as 2029 to 2031, she predicts.

Freidheim believes that we’re likely 12 to 24 months away from seeing the first true wave of AI IPOs.

“The demand is undeniable. Investors want direct exposure to AI pure plays, not just the tech giants who dominate the space today,” she told Crunchbase News. “But markets reward discipline: The companies that succeed will be those with sustainable business models, predictable revenue, and real customer adoption. The technology is moving faster than the capital markets, but the pipeline is there, and once a few credible leaders break through, the rest will follow quickly.”