Strength of the U.S. IPO Market

In the conversations I’ve had with clients across multiple sectors, the tone has shifted. There’s a sense that we’ve moved from tentative optimism to more deliberate action. Issuers who have been waiting for the right window are now stepping in. Macro risk hasn’t disappeared – as the events of this past weekend demonstrate – but investors are more engaged, and the ingredients for activity – market stability, supportive rates, and dry powder are increasingly falling into place. From all those calls and meetings, I’ve seen several themes emerge.   The IPO market is clearly reawakening after a pretty subdued six months. In just over a month, we’ve worked on seven out of the last nine IPOs in the US to price, and performance generally remains strong. Each transaction attracted significant interest from high quality investors, with order books multiple times oversubscribed, pricing at the high end of their initial filing ranges and are all trading well in the aftermarket. Executing these deals in quick succession is a strong signal that the IPO market is open for business.   Secondary issuance has been notably active: May marked our busiest months for follow-ons since 2021, with momentum carrying into June. Execution has been disciplined, with tighter pricing and strong investor participation.   Debt markets remain open but nuanced. High yield and leveraged loan volumes are close to last year’s levels despite a lighter LBO calendar. In investment grade, the bid for duration – especially on M&A-linked deals – is striking. Investors are showing a clear preference for structure and term. We’ve also seen issuers move early to pre-fund, with corporate hybrids up 45% and AT1 supply up 50% YoY.   Private equity remains selective but active. Sponsors are balancing pressure to return capital with a renewed ability to deploy. Dual-track processes are widespread, and the IPO route is becoming viable again for a broader set of companies.   Overall, confidence is key and those willing to move with it are being rewarded. The setup heading into H2 feels constructive to me.

After years of slow momentum, the IPO market is alive again. 2025 has already become the strongest year for IPOs since 2021. There have been 277 listings so far, raising over $50 billion in total, 22 of which were billion-dollar deals! Average first-day gains are sitting around 34%, the second-best performance in more than a decade. Investors aren’t just chasing the pop. IPOs this year have gained 27% on average post-listing, outpacing the S&P 500’s 15% return. Larger offerings have performed especially well, showing that scale and structure still matter in volatile markets. Across the Atlantic, Stockholm is having its own breakout year. Despite fewer listings, Nasdaq Stockholm has raised six times more capital than last year, with average first-day gains near 19%, its second-best result since 2014. Both the U.S. and Stockholm IPO Pulses, Nasdaq’s forward indicators, point to continued strength into 2026. While the U.S. market will temporarily pause during the government shutdown, history shows such disruptions are short-lived. The underlying trend remains clear: confidence is back. After a long, quiet stretch, global IPO markets are showing renewed health, disciplined pricing, and stronger post-listing performance. It’s not just a rebound, it’s a reminder of how sentiment shifts when performance returns.

◾ Despite the S&P 500 near its all-time high and widespread concern about an equity market bubble, US equity investor positioning remains in light territory. Our Sentiment Indicator has risen from its low of -0.9 at the end of August to just -0.6 currently. However, some smaller slices of the equity market have recently signaled clearer signs of increased risk-taking, such as quantum computing stocks (+61% since the start of August). ◾ Growing investor risk appetite has also been reflected in the US IPO market. There have been 46 IPOs greater than $25 million YTD, totaling $24 billion. This represents an 18% increase in the number of IPOs vs. the same period in 2024 and puts 2025 on pace for the strongest year since 2021 (261), although still well below the historical average volume of issuance. The average IPO this year has returned 30% on its first day of trading, on track for one of the strongest years on record. ◾ The value of announced US M&A is up 29% year/year, with transactions skewed towards large deals. The number of announced M&A transactions has grown by 8% year/year, with the count of 566 deals YTD close to the 15-year average. ◾ We expect IPO and M&A activity will increase in 2026 alongside accelerating US economic growth, improving CEO confidence, and a rising equity market. Our IPO Issuance Barometer stands at 139 today, ranking in the 88th percentile since 2002, and we forecast a 15% increase in the number of completed US M&A deals in 2026. ◾ The equity market appears to have priced some of the resurgence in capital markets activity. Banks and Capital Markets stocks have outperformed their macro-implied returns by 10 pp and 7 pp, respectively, during the past 12 months. However, Alternative Asset Managers have lagged by 13 pp and represent a potential catch-up opportunity. Our equity analysts recommend being selective in the group given elevated valuations, highlighting CG, KKR, and TPG as stocks with accelerating growth and reasonable multiples. ◾ Improving M&A activity should also benefit the valuations of potential US M&A Candidates (GSRHACQN). The basket has outperformed the equal-weight S&P 1500 by 7 pp since the start of September.

We’re about to witness three of the largest IPOs in history. SpaceX is targeting $1.5t. OpenAI aims for $1t. Anthropic is valued at $380b. Combined, $2.9t in market cap. The scale is unprecedented. But the real problem isn’t the market cap. It’s the float. Typical IPOs offer 15-25% of their shares to public markets. This creates enough liquidity for price discovery while allowing founders & early investors to maintain control. Facebook floated 15%. Google floated 19%. Alibaba floated 15%. At a 15% float, here’s what these three IPOs would require : (first image) At standard float percentages, these three companies would need to raise $432-576b from public markets in a single quarter. From 2016 to 2025, the entire US IPO market raised $469b. It’s like throwing a boulder into a pond. Standard floats are impossible, so these companies will debut with tiny ones, likely 3-8%. But that creates a different problem. The S&P 500 requires 50% public float for inclusion. At 3-8%, none qualify initially. When they do, the disruption begins. SpaceX at $1.6-2t would challenge Meta for spot #6, potentially slotting in behind Amazon. When they qualify, passive funds managing $20t must buy. Index funds can’t raise cash. They sell existing holdings. The mechanics become self-reinforcing. Index funds sell existing mega-caps to buy new entrants. Lower mega-cap prices trigger momentum strategies to sell further. Additional selling creates more pressure on the very stocks index funds track. These companies have challenged every assumption within their core markets. Now their IPOs will challenge every assumption about public financial markets.

106 IPOs. $1.1B raised. 22% jump in deal flow. Today's NYT headline about "waiting to go public" missed these numbers. Our data tells a different story in the microcap world. The article highlights Turo canceling its IPO and suggests market uncertainty is stalling public offerings. But what we're actually seeing is a market that's becoming more selective, not less active. Our LB DataDesk Data Desk 2024 year-in-review tracking shows:   ↳ Median raises dropped 12.5% to $7M ↳ Average price fell 11% to $5.04 ↳ Deal scrutiny has intensified ↳ The bar for fundamentals has risen This isn't companies "getting cold feet" - it's strategic timing. Investors are demanding stronger fundamentals before writing checks. Being "IPO ready" in 2025 means something different than it did in years past. What separates companies that successfully IPO in today's market? They've used waiting periods strategically: strengthening fundamentals, building institutional relationships, and preparing for higher scrutiny. The market isn't closed. The requirements have changed. Smart founders and CEOs aren't just asking if they can go public. They're asking if they should - and what they need to strengthen while they wait.

This isn't a return to IPO euphoria. It's the emergence of a more selective, more disciplined public market. In the last two weeks: 🔹 eToro – listed at ~$5B, surged ~40% 🔹 MNTN – jumped 31% on Day 1 🔹 Hinge Health – priced at the top of range and climbed from there All three went public below their last private valuations. But they went public anyway. That's the signal. The IPO market isn't warming up because valuations are peaking. It’s reopening because rational pricing is finally being accepted, by both founders and allocators. This is capital formation in a post-FOMO era. And investors are rewarding the shift. 👉 Oversubscribed books 👉 Disciplined pricing 👉 Measured post-listing performance This isn't a window for hype. It's a test of confidence, and for the first time in years, it's holding. At Finalis, we're tracking this shift across the ecosystem – seeing advisors recalibrate guidance, capital seekers adjust expectations, and allocators lean in when pricing aligns with fundamentals. May 2025 may prove to be the true inflection point. Not a flood yet, but the ice is cracking. What signals are you watching? And how are you advising late-stage exposure under this new regime? #IPO #CapitalMarkets #VentureCapital #LiquidityEvents #TechIPO #InstitutionalInvesting #Finalis

The U.S. IPO market is set for a strong comeback in 2025 after a three-year slowdown caused by high interest rates. Private equity firms are expected to play a key role, as they aim to offload major holdings like Medline and Genesys. Recent IPOs have performed well, boosting investor confidence, with many of the largest 2024 IPOs delivering strong returns. Key factors driving this resurgence include: 1) Federal Reserve rate cuts supporting dealmaking and fundraising. 2) Private equity pressures to return capital to investors after a long drought. 3) Investor preference for large, profitable companies over lossmaking startups. Upcoming IPOs may also feature prominent fintech players like Klarna and Chime, reflecting growing optimism across various sectors. Favorable market conditions and strong stock performance signal a robust IPO market for 2025.

2026 is shaping up to be a real IPO year 📈 PwC’s latest US Capital Markets Outlook reinforces what many of us are seeing firsthand: the IPO market quietly regained momentum in 2025, and the setup for 2026 looks materially stronger. Importantly, PwC is not alone in that view. Recent outlooks from KPMG US and Deloitte point to the same conclusion — capital markets activity is stabilizing, investor selectivity is improving, and companies that are scaled, profitable, and well prepared are finding real demand. Where will the list (NYSE, Nasdaq, Texas Stock Exchange | TXSE Group Inc)? A few signals worth highlighting from 2025: • Through November, 72 traditional IPOs raised over $33.6B, eclipsing full-year totals from each of the last three years • Issuance accelerated meaningfully in late summer and early fall, with September the busiest month for new listings in years • Eight IPOs priced during the October–early November government shutdown, underscoring depth of investor appetite even amid uncertainty • Sponsor-backed IPOs delivered their strongest year since 2021, with post-IPO performance averaging roughly 22% • VC-backed IPOs returned with fewer but larger, more profitable, and more operationally mature companies • SPAC issuance posted its most active stretch since 2021, rebuilding a meaningful forward pipeline Why the timing matters ⏱️ PwC, KPMG US, and Deloitte all point to the same dynamic: a backlog of companies that were “ready enough” in 2025 but delayed by market windows, SEC timing, or strategic considerations. Many of those issuers are now targeting early-to-mid 2026, supported by more stable rates, improving aftermarket performance, and investors willing to engage again — with discipline. The same sectors consistently rise to the top: • AI infrastructure and AI-enabled software • Insurance and specialty risk platforms • Industrials, reshoring, aerospace, and defense The companies best positioned for a 2026 IPO are not waiting for the window to open. They are preparing now aligning governance, financials, equity story, and regulatory strategy so they can move decisively when conditions line up. At Winston & Strawn LLP:, we work with issuers well before the S-1 stage, including through our IPO Training Camp and broader public company advisory platform. Our focus is practical and execution-driven: helping companies get transaction-ready early and move efficiently when timing matters. If 2026 is on your roadmap, now is the moment to build real optionality. #CapitalMarkets #VentureCapital #AI #WinstonStrawn #IPOTrainingCamp Eric Johnson

September is set to price 12 IPOs totaling $8B, the busiest month since 2021 by both deals and volume. Activity spans crypto (Gemini, Figure), fintech (Klarna), consumer (Black Rock Coffee), energy/industrials (Legence, Waterbridge), and the first biotech IPO since February (LB Pharmaceuticals). Investor demand is strong, with heavy roadshow engagement from blue-chip mutual funds, oversubscription at COVID-era levels, and >70% of deals pricing at the top end. Median IPO market cap is $4.2B (3.8x pre-COVID), with a median deal size of ~$730MM and ~90% of float trading Day 1. Investors remain focused on scale and liquidity, while deleveraging remains a theme (e.g., Legence shifting its greenshoe fully primary). Performance has been constructive but volatile: IPOs are up +16% on average (10 of 12 above issue), outperforming the S&P by ~12ppts, though Day 1 trading has seen wide swings. Momentum looks set to continue with 20+ IPOs possible before year-end, potentially bringing 2025 issuance above $40B. #IPO #CapitalMarkets #EquityCapitalMarkets #MarketUpdate #InvestmentBanking #DealFlow #Fundraising #FinancialMarkets #InvestorDemand #Liquidity #Valuations #EquityMarkets #venturecapital

Quick recap of the PitchBook Q1 2025 IPO Expectations report - my longer overview coming soon. The State of VC-Backed IPOs: A Slow Recovery Ahead Despite a strong public market, VC-backed IPOs remain sluggish, hitting their lowest levels since 2011. Only 40-42 IPOs per year were completed from 2022 to 2024, compared to 193 in 2021. High valuations, risk-averse investors, and macro uncertainty are key barriers. While some companies like Reddit and Astera Labs performed well post-IPO, half of non-healthcare unicorns in 2024 priced below their last private valuation, highlighting pricing mismatches. Why 2025 Could See a Moderate Rebound • Rate Cuts: Expected Fed reductions could improve investor sentiment. • Liquidity Pressures: Late-stage startups need capital, and secondary financings are scarce. • Strong Public Market: The S&P 500 gained 23.3% in 2024, creating a better IPO window. However, recovery will be slow. The Fed remains cautious, and investors now prioritize profitability. Tech IPOs that once traded at 20x+ revenue multiples now struggle to sustain 6x. The Growing IPO Pipeline After three years of low IPO activity, 601 startups now meet historical IPO benchmarks, up from 288 in 2021. AI, fintech, and healthtech lead the list, but valuation compression remains a challenge. Notable IPO candidates include: • StockX ($3.8B) • GrubMarket ($3.6B) • Indigo ($3.95B) • Zocdoc ($1.8B) Many unicorns may need down rounds or secondary sales before going public. IPO Forecast for 2025 • H1 2025: ~21 IPOs expected. • H2 2025: 30-40 additional IPOs if rate cuts materialize. • Full-Year Projection: 51-61 IPOs—better than the past three years but far below pre-2022 levels. A best-case scenario would see ~75 IPOs, improving VC liquidity but still short of 2021’s surge. Key Takeaways for Investors & Startups • VC-backed IPOs will increase but won’t return to past highs. • Down rounds and valuation cuts will be common. • AI, fintech, and healthtech startups dominate the pipeline but face fierce competition. • LPs are pressuring VCs for liquidity, forcing some startups to go public prematurely. • Rate cuts and economic strength could drive a moderate rebound, but uncertainty persists. For startups eyeing an IPO, the bar is now higher than ever. Investors demand real fundamentals—growth alone won’t cut it in this new era.