As investor sentiment shrinks due to tariff risks from U.S. President Donald Trump, global stock markets have seen significant declines, and the expectation for a rebound in the initial public offering (IPO) market has also rapidly cooled, foreign media reported.
According to Business Insider (BI) on the 7th, expectations were high that the IPO market would finally rebound this year after years of sluggishness. The stock price of the construction software platform "ServiceTitan," which went public last December, surged 35% on its first day, and major startups such as "Klarna," a buy now, pay later service, "StubHub," a ticket resale platform, and "CoreWeave," an artificial intelligence (AI) infrastructure company, were anticipated to go public this year.
However, as uncertainty looms over the global economy due to President Trump's tariff policies, the "big fish" in the IPO market have begun to lower their offering prices and delay their listings. CoreWeave, which went public last month, was forced to list at a lower-than-expected offering price, and Klarna and StubHub, which were scheduled to go public this month, decided to postpone their listing dates.
Matt Kennedy, senior strategist at Renaissance Capital, noted to BI, "Just a few months ago, all market signals pointed to 2025 as a year of IPO rebounds," but he explained that such expectations have collapsed. Renaissance Capital projected that the number of IPOs this year could drop below 150. This would mark a decrease for the fourth consecutive year, extending the prolonged stagnation in IPOs.
According to BI, in 2021, a total of 311 corporations raised $119 billion (approximately 175 trillion won) through IPOs in the U.S., setting a record high. However, after that, IPO performance fell sharply each year. The total amount raised through IPOs in the three years from 2022 to 2024 was only $39 billion (approximately 57 trillion won), which is less than one-third of the figure achieved in 2021.
While there were signs of a rebound this year, the expectations have been dampened by the impact of President Trump's tariff policies. Concerns over the global trade war have made it difficult for corporations to present long-term growth prospects, and "future growth potential," which is considered crucial in the IPO process, is no longer an attractive investment factor. Kennedy stated, "Going public in a market as volatile as this is extremely difficult."
Some interpret that the stagnation in the IPO market stems from more structural changes. High-growth startups are no longer reliant on IPOs. For instance, the space exploration firm "SpaceX" and the electronic payment fintech company "Stripe" have achieved rapid growth without going public. "OpenAI," which led the generative AI boom, is also operating as a private company.
Craig Coven, former global head of equity capital markets at Bank of America (BoA) Merrill Lynch, remarked to BI, "There is a lot of capital available in the private market, so companies do not necessarily need to go public and endure unnecessary regulations and disclosure obligations."
However, BI pointed out that "while well-known startups can maintain their businesses without going public, it is not the case for smaller startups with high growth potential that still rely on IPOs as an important capital raising method." It added that "lowering the valuation to make an IPO successful in a frozen market is one way to do it."