Forecast: 2024 Was Slow For Tech IPOs, But 2025 Could Be Different

After another slow year in 2024 for new tech listings, there is an expectation that the IPO markets will pick up in 2025.

A year ago, the outlook was not bullish. What has changed?

鈥淚 think there’s a lot of confidence in the market. Stock markets are trading at all-time highs,鈥� said of legal advisory firm . And 鈥渢here’s been a rotation back to focusing on growth, which obviously is great for tech.鈥�

High-growth tech companies who were readying to list in 2022 鈥� before the stock market correction 鈥斅爃ave now had three years to manage costs and grow their businesses.

鈥淲e鈥檙e far enough away now from the market shock that we had a few years ago,鈥� said Ben-Tzur. 鈥淭here was a ton of uncertainty around valuations which isn’t conducive to either IPOs or M&A. I think now people know what their valuations are. They’ve got more clarity around that.鈥�

High-profile filings

鈥淏uilding on the success of the IPO and a handful of others in 2024, expect to see the IPO window open wider in 2025,鈥� said , a partner at , via email, who led Index鈥檚 investment in ServiceTitan and is on the board of the software company, which went public on Dec. 12.

鈥淲e should see companies start to test the public markets in 2025 across sectors 鈥� fintech, cyber, AI, and SaaS, among others,鈥� Achadjian said.

Among the largest startups widely viewed as IPO candidates are Sweden-based , a high-profile buy now, pay later provider that has confidentially filed for a public offering with the . The company was most recently valued at $6.7 billion in a July 2022 funding that shed $39 billion from its previous valuation.

Another likely 2025 IPO is , an AI chip company that filed in September. It was last valued at just over $4 billion in November 2021.

鈥淲e’ll start to see momentum in the beginning of the year, and really accelerate, as the year goes on,鈥� predicted Ben-Tzur, who saw early momentum in 2024 that then tailed off.

Looking back

附近上门 tracks the largest U.S.-based company IPOs on its Billion-Dollar Exits Board. Nine such venture-backed companies went public above a billion dollars in 2024 鈥� with ServiceTitan being the most recent 鈥� compared to 10, including four SPACs, in 2023. Those figures are well below historical norms.

The largest 2024 listings were across a range of sectors and have largely held up. Biotechnology counted for two companies, with the rest in widely different tech sectors ranging from social media to semiconductors and cybersecurity to autonomous driving.

and , both listed in March, were the strongest performing new stocks this year. With the exception of those two companies and , shares of the other larger tech IPOs of 2024 as of Dec. 16, 2024, are all trading around or slightly below their IPO values.

Unlocked value

While many companies have delayed IPOs for the past three years, for most, going public is still the ultimate goal.

鈥淭here鈥檚 an incredible amount of unrealized value that can be unlocked by going public, and I expect that the small handful of venture-backed businesses that leaned into the IPO markets in 2024 will serve as leaders for private companies that might have otherwise waited for 鈥榩erfect鈥� market conditions,鈥� said Achadjian.

Ben-Tzur concurred: 鈥淔or many of our clients, being public is a tailwind for the business. It just raises the company’s profile. It makes the company much more of a credible entity.鈥�

It is also easier as a public company versus a private company to acquire other companies and to raise capital, he said.

ServiceTitan pops

ServiceTitan opened 42% above its IPO price in its December public debut 鈥� a good signal for the public markets as we close out 2024.

鈥淭here was a pop there that people weren’t expecting,鈥� said , head of insights at startup equity management platform .

A software provider to home services businesses, ServiceTitan posted 鈥斅爑p 23.7% year over year with narrowing losses of $35.65 million.

ServiceTitan is not a brand name, not an AI company, and its customers are small businesses rather than larger enterprises, Ben-Tzur noted. 鈥淚t’s a good barometer for companies that aren’t necessarily the largest private companies,鈥� he said.

Businesses with strong fundamentals will do well even in a less-than-perfect market, Achadjian said. 鈥淓ven in tough economic cycles, businesses with strong unit economics, a sizable TAM, and precise knowledge of what their customer needs will find success on the public markets,鈥� she said.

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