IPO Insights Q1 2025
Perspectives on the quarter’s market trends
Taking a company public can boost its profile and provide much needed capital resources. But ensuring readiness for the capital markets requires a keen understanding of the current IPO landscape—significant exits; sectors on the rise; trends in deal prices, sizes, returns; and more.
IPO Insights delivers the latest information and analysis on IPO activity and performance. Prepared by professionals from the KPMG Capital Markets Readiness and KPMG Private Enterprise practices, this quarterly report is designed to help private business leaders prepare their companies to join the capital markets.
Seeking certainty
It was a quarter of deep uncertainty in IPO markets. 2025 dawned with investor confidence riding high on the expectation that the new administration would be more business friendly than the last. Within weeks, however, uncertainty about the impact of tariffs and other policy stances had started to take hold, pushing major US indexes lower and dampening expectations for IPO activity.
Yet, in the end, Q1’25 was one of the best quarters of the past two years with U.S. IPO volume up 7 percent and an increase in gross proceeds from these activities of 60 percent over the previous quarter. Somewhat tellingly, four of the five biggest debuts of the quarter closed by February 12th (on February 13th, the administration announced a plan to introduce global reciprocal tariffs).
IPO activity in the quarter was driven by three megadeals worth more than $1 billion each, alongside increased activity in the industrial manufacturing (IM) and technology, media, and telecommunications (TMT) sectors. Similarly, the Energy and Natural Resources sector experienced it’s biggest quarter-over-quarter increase in proceeds. However, with the volatility index (VIX) up and interest rate cuts on hold while the Fed discerns the impact of tariffs on the U.S. and global economy, activity slumped through the end of the quarter and will likely remain subdued while investors assess market stability.
Highlights of Q1’25
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The number of U.S. IPOs was up 7 percent and the increase in gross proceeds from these activities was up 60 percent quarter-over-quarter.
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Three IPOs raised more than half of the quarter’s total proceeds.
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The Energy and Natural Resources sector saw the biggest increase in proceeds quarter-over-quarter, while TMT saw the greatest increase in volumes.
4
No. of IPOs and gross proceeds (US$B)
The below data includes four direct listings, each closed in 3Q23, 4Q23, 3Q24 and 1Q25 respectively
The high levels of cautious optimism going into the quarter helped propel IPO markets to a strong start. But, as uncertainty began to build into market dynamics on the back of tariff turmoil, IPO activity and investor appetite started to wane. So, while the headline data for Q1’25 seems to suggest a reopening of IPO markets, many private market investors and owners are taking a wait and see approach.
Conor Moore
Global Head, KPMG Private Enterprise
Megadeals move the market
While the IM sector led the tables by deal volume (recording 20 IPOs in the quarter and raising just over $1 billion), it was TMT that drove much of the activity. The sector brought 15 listings to market (up from nine in the previous quarter) and saw gross proceeds rise 130 percent, largely driven by investor interest in AI companies. The sector was led by an AI infrastructure company, which raised $1.5 billion, and by an AI-driven identity security firm, which raised $1.4 billion. While the valuations of these two big listings declined through the quarter, the sector still returned a 154 percent gain, positioning TMT as the best performing sector in the quarter.
Energy and natural resource companies saw the greatest increase in amounts raised (up from $47 million in Q4’24 to $2.45 billion in Q1’25), largely on the back of the quarter’s biggest listing – a liquified natural gas provider – which raised nearly $1.8 billion.
US IPO performance by sector - Average 1Q25 returns(a)
Many of the private market clients we work with are now looking to start trading in late 2025, or even into 2026. It takes time to become IPO-ready, and many organizations are using this pause in market activity to make sure that – when certainty does return to the markets – they are ready to make the most of the opportunity.
Shari Mager
Partner and U.S. National Leader, Capital Markets Readiness, KPMG LLP
VC and PE take pause
VC enjoyed its highest exit value since Q1’22, with public listings making up just 4 percent of total exit volume, but 46 percent of exit value for VC firms, led by a $1.5 billion IPO. In the end, just 12 VC-backed companies came to the public markets, while several VC-backed companies postponed their debuts on the back of extreme market volatility and concerns about the impact of tariffs.
PE enjoyed a significant boost early in the quarter. Yet, by the end of the quarter, total exit volume had fallen 19 percent versus the previous quarter, suggesting that market volatility and regulatory risks may continue to challenge the timing of exits for many PE-backed companies.
US VC exit volume by type (Percentage share)
Percentage share of each type of VC exit in the total number of exits
US PE exit volume by type (Percentage share)
Percentage share of each type of PE exit in the total number of exits
Future trends
IPO candidates wait to see
Recent macroeconomic trends may have encouraged some IPO candidates to delay their offerings. But data from the quarter suggests that it has not translated into an uptick in cancellations.
Currently, there are around 232 IPOs announced that have not closed; 67 were announced during the most recent quarter. IM and TMT companies make up 45 percent of the current IPO pipeline. Just 11 companies decided to cancel their IPOs in the quarter, down from 14 in the prior quarter, 19 in Q1’24 and 32 in Q1’23.
Many of the IPO candidates we speak to have noted ongoing uncertainty, oscillating between deep concern about the macroeconomic environment and cautious optimism. As such, we expect to see the pipeline grow over the next few quarters as private market companies start to prepare for an eventual opening of the IPO window.
Corporate bonds bridge the gap
U.S. corporate bond issuance is up significantly in the first quarter, as private market companies seek new sources of funding to bridge the gap until the IPO window fully opens. The quarter saw $637 billion in new corporate bonds issued, up from around $300 billion in Q4’24.
The uptick in Q1’25 was predicated on favorable borrowing conditions, strong investor demand and increased interest in debt amid a volatile economic climate. Indeed, the quarter saw the S&P U.S. high yield corporate bond index, which tracks the U.S. bond market performance, increase slightly from 7.1 to 7.2. However, the outlook for the remainder of the year is mixed, with ongoing uncertainties related to the global tariff situation and economic policies causing issuers to remain cautious.
Outlook for Q2’25
With uncertainty regarding the tariff environment, macroeconomic trends and interest rates weighing on public markets, we expect second quarter activity to remain slow as viable candidates (particularly those reliant on international trade) delay their debuts in the hope of greater stability later in the year.
That being said, companies operating in sectors deemed to be priorities for the U.S. administration (such as energy, artificial intelligence, crypto and rare earth minerals) may find strong investor appetite for new listings. But timing will be everything.
At the end of last year, we projected a strong year for IPOs in 2025. However, like most other investors and analysts, we have been forced to revisit our forecasts in the face of ongoing uncertainty. Much will depend on how current trade negotiations and tariff decisions play out over the coming quarter.
How KPMG can help
Understanding the key trends and investor expectations is critical to preparing for an IPO. Investment narratives matter. They cut through the deluge of data and analysis, and help companies sift real windows of opportunity from market noise. And the most compelling deal stories come from insights about a company’s unique mix of valuation drivers. Sector. Markets. Customers. Portfolio mix. Capital structure.
At KPMG, our professionals offer a range of services specifically designed to help privately owned companies—venture-backed or otherwise—navigate each stage of the IPO journey. We help entrepreneurial ventures simplify the complex challenges of going public, while helping ensure they meet their diverse regulatory, compliance, and reporting requirements.
Working with KPMG, you gain access to trusted advisers who share your entrepreneurial mindset. And we can help you understand and improve the factors that drive maximum deal value for your offering.
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