As 2025 unfolds, global markets are witnessing a marked slowdown in initial public offerings. The first half of the year saw companies raising just $13 billion through IPOs, marking the slowest IPO start in five years. This slowdown follows unprecedented highs in 2021 and sustained challenges through 2022 and 2023. Against this backdrop, issuers and investors alike are navigating a landscape defined by cautious valuations, selective dealmaking and emerging regional opportunities.

Despite muted overall volumes, pockets of strength have appeared mid-year, offering glimmers of renewed confidence. A handful of standout debuts has reminded stakeholders of IPOs’ transformative potential—but the journey to a full market recovery remains uncertain.

Historical context and current trends

The record-setting IPO boom of 2021, fueled by SPACs and high-growth technology issuers, abruptly gave way to a more guarded environment. Investors, burned by post-listing volatility, tightened their criteria, prioritizing sustainable earnings and strong governance.

In Q1 2023, only 284 IPOs (excluding SPACs) raised $25 billion, the lowest quarterly total since the early pandemic (Q2 2020: $35.7 billion). By mid-2025, companies had raised $13 billion—underscoring how market windows can close quickly under pressure. Yet, a handful of successful listings in tech and healthcare during Q2 suggests that selective opportunities remain for issuers with compelling stories.

Regional dynamics shaping global markets

Geographical shifts are redefining IPO hotspots. The United States and Europe are showing tentative signs of revival, while emerging hubs are increasingly stealing the spotlight.

• United States and Europe: Renewed activity in tech and life sciences, though Europe experienced a slight dip in Q1.
• India and Middle East: Fastest-growing IPO centers, supported by deep liquidity and robust pipelines in emerging markets.
• Asia-Pacific: Stable issuance driven by ongoing tech innovation, particularly in consumer electronics and software.

This regional mosaic highlights how capital can flow to markets offering the best combination of growth prospects and regulatory support.

Valuation environment and investor sentiment

Investor aversion to inflated valuations has become a defining feature of the current cycle. Companies planning to list must demonstrate both a clear path to profitability and positive cash flows to secure backing. Without these fundamentals, issuers risk deferring or withdrawing their IPO plans.

The cost of capital, while easing from its peak, remains relatively high. Fixed-income instruments now offer attractive yields, diverting funds from equity markets. As a result, IPO candidates are under pressure to structure offerings that reflect realistic valuations, balancing issuer ambitions with investor demands.

Sector-specific insights and notable deals

Technology continues to dominate global IPO volume, accounting for roughly 25% of total deals in Q1 2025. Investors remain drawn to companies that leverage AI, cloud computing and digital platforms, even amid broader market caution.

• Life sciences: Anticipated to gain momentum in H2 2025 as biotech firms with late-stage trial successes seek public funding.
• SPACs: Now a niche avenue, with fewer sponsor-backed deals compared to the 2020–2021 surge.
• Fintech and e-commerce: High-profile potential IPOs include Stripe, Databricks, Reliance Jio and Shein, illustrating diverse sector interest.

Recent IPO performances have varied dramatically. Circle Internet Group (CRCL) surged 170% on day one, while CoreWeave (CRWV) enjoyed a 300% price lift since its March debut. Omada Health (OMDA) gained 21%, and Voyager Technologies (VOYG) doubled on the first trading day, achieving a $3.8 billion valuation. Despite these standout successes, aggregate proceeds and deal counts remain below the highs of earlier cycles.

*2025 figures are projections; H1 is actual.

Macro factors and forward outlook

Broader economic and geopolitical forces continue to shape IPO dynamics. Persistent inflation, fluctuating interest rates and trade tensions weigh on confidence. Market volatility can close IPO windows at short notice, compelling companies to delay filings or accept lower valuations.

Regulatory reforms and pro-business policies in select jurisdictions offer a counterbalance, but uncertainty around tariffs and global relations persists. Against this backdrop, 2025 projections suggest between 140 and 160 IPOs raising $45–$50 billion—uneven activity and valuations even as some markets firm up.

• Focus on strong financials and profitability to attract wary investors.
• Time offerings to coincide with periods of market stability.
• Leverage regional strengths, prioritizing jurisdictions with supportive regulation.

Conclusion

In a valuation environment defined by caution, IPO activity in 2025 is set to remain selective and regionalized. Issuers with resilient business models, credible growth trajectories and optimal timing will find openings—even as broader volumes trail historical peaks.

For investors, the era rewards patience and discernment, spotlighting companies that pair innovation with viability. As market windows reopen, the next wave of public offerings may blend risk and opportunity more evenly than in recent years—charting a path toward a sustainably revived IPO landscape.