IPO Insights Q2'25
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.
Taking a pause to reassess
Amid heightened volatility and continued market uncertainty, U.S. IPO markets declined in Q2’25, breaking a six-quarter growth streak. And while expectations for a deregulation-fueled rebound remain high, data from Q2 suggests the IPO window is not yet broadly open, with each listing having to justify its timing and pricing.
Off the back of a comparatively strong Q1, the slowdown in activity in Q2 was notable. Quarter-over-quarter, IPO activity declined by 16.7 percent in Q2’25 with 50 IPOs. Gross proceeds fell by 11.8 percent to $7.5 billion. Relatedly, the number of IPO cancellations rose 64.3 percent from the previous quarter.
There were pockets of heightened activity in the quarter, however. The Financial Services sector brought 14 IPOs to market, followed by Industrial Manufacturing with 12 IPOs. The SPAC market also saw a significant resurgence with 46 IPOs conducted in the quarter, raising a total of $8.8 billion.
Looking ahead, expectations are growing for a cautious reopening of markets in the second half of 2025, backed by strong fundamentals, resilient sector performances and greater clarity on geopolitical exposures.
Highlights of Q2’25
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No. of IPOs(a)(b) and gross proceeds (US$B)
The below data includes five direct listings, each closed in Q3’23, Q4’23, Q3’24, Q1’25, Q2’25 respectively
While the headline numbers suggest a pull back, it was encouraging to see a number of bigger name companies come to market in the quarter. I think we are seeing a view emerge that markets are now going to be a bit more stable and that, coupled with strong investor appetite, should drive the IPO markets to open up somewhat in the third quarter.
Conor Moore
Global and Americas Head, KPMG Private Enterprise
Tech and fintech capture investor attention
The Financial Services sector dominated activity in Q2’25 with 14 IPOs, raising gross proceeds of $3.6 billion. This was led by a trio of larger IPOs, which enjoyed strong tailwinds from investor demand for Fintech offerings. Yet performance was mixed within the sector, delivering an average return of just 2.8 percent.
The Technology, Media & Telecommunications (TMT ) sector, on the other hand, saw average returns of 46.9 percent from 10 IPOs. Momentum for TMT offerings is expected to surge in the second half of 2025, fueled by AI, cybersecurity, cloud computing and digital payments innovation.
Consumer and Retail also delivered a noteworthy quarter with solid growth in volumes (up more than 250 percent) and strong average returns at 28.5 percent. However, with the exception of a $411 million raise (a tea company), the remaining IPOs in the C&R sector each raised $10 million or less.
US IPO performance by sector - Average Q2’25 returns(a)
Those companies with strong stories, clear pathways to profitability and low exposure to potential tariffs are pushing the IPO door open – building investor confidence and driving momentum within IPO markets. Private market leaders will want to stay at a high level of readiness so they can move quickly when the opportunity is right.
Shari Mager
Partner and U.S. National Leader, Capital Markets Readiness, KPMG LLP
VC and PE look for exits
While VC exit volumes fell slightly in the quarter, total exit value hit its highest level since Q4’21, driven by the IPOs of six companies with pre-money valuations of more than $1 billion each. Yet down-rounds have also become more prevalent, with many VC firms prioritizing capital and liquidity over maintaining elevated pandemic-era valuations.
Private Equity (PE) public market exit volume fell significantly – from 15 IPOs in Q1’25 to just 5 in Q2’25 – reaching its lowest level in two years. However, total exit value remained well above most other quarters, showing a 41.6 percent year-over-year increase. While all signs suggest the tech sector remained resilient, the overall decline in public market exits likely reflects broader macroeconomic and geopolitical concerns in the markets.
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
Will deregulation spark a rally?
Market volatility may have muted momentum in Q2. But our conversations suggest many private company leaders and investors expect the markets to receive a boost in the second half of 2025 on the back of improved regulatory conditions across key industries.
TMT is looking for relaxation on antitrust policies to drive AI innovation. Fintechs are hoping for deregulation around crypto. Energy companies see opportunities for increased energy production. Manufacturers expect to see dividends from the Make in America agenda. At the same time, industry perceptions are rapidly shifting, especially regarding China-developed AI models.
But will deregulation spark a broader rally? Early signs point to robust activity in sectors like AI, aerospace, defense and space which are drawing investor interest due to rapid advancements. Some sectors – such as pharmaceuticals and government contractors – may face some headwinds. However, given the heightened levels of uncertainty around policymaking, it seems most investors are taking a wait-and-see approach for the time being.
Assessing alternative routes to market
In Q2, U.S. markets saw 46 SPAC IPOs, raising a total of $8.8 billion (traditional IPOs raised just $7.5 billion) with Q2 seeing the highest number of SPAC IPOs and gross proceeds raised in the past two years.
In part, the interest in SPACs is being driven by concerns about the strength of traditional IPO markets which is encouraging some private market leaders to consider more flexible alternatives such as SPACs. At the same time, some high-growth companies see SPACs as a way to quickly move into public markets, particularly in hot areas such as crypto which may see significant tailwinds from recent policy developments. The hope is that SPAC leaders have learned their lessons from the boom and bust of the early 2020s.
Looking ahead, we expect SPAC IPOs to maintain their momentum as an alternative to traditional IPOs in the second half of 2025, although that may change should traditional IPO channels reopen with strength.
Outlook for Q3’25
While IPO markets will likely remain subdued in the early part of the third quarter, we expect to see a selective opening with investors clearly favoring candidates with strong operations and sector resilience – particularly those deemed sheltered from potential tariff disruptions and geopolitical exposure.
As such, we expect the market recovery to be uneven with some companies advancing with revised valuations and strong investor confidence while others deliberately delay in order to avoid valuation compression and poor debut optics.
Overall, however, U.S. IPO activity is expected to cautiously build with investors favoring offerings backed by strong fundamentals, resilient sectors and low geopolitical exposure amid ongoing macroeconomic adjustments.
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 LLP, 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 help drive maximum deal value for your offering.
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