IPO Insights Q3 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 practice, this quarterly report is designed to help private business leaders prepare their companies to join the capital markets.
Enthusiasm amidst uncertainty
Against a backdrop of continued economic and trade uncertainty, U.S. IPO markets seemed to find their footing. Indeed, the IPO market enjoyed one of its busiest quarters since Q4’21 on the back of strong investor interest, solid deals and a healthy pipeline of listings.
It was certainly an active quarter. The number of IPOs was up 38 percent quarter-over-quarter with gross proceeds up more than 100 percent, delivering $15.4 billion of new funding to those listing in the quarter. Cancellations – which had reached record highs last quarter – fell more than 60 percent, marking one of the lowest levels of cancellations in the past six quarters.
Four billion-dollar-plus deals came to market with the largest raising $1.37 billion. Yet despite the top three enjoying notable first-day pops, all four ended the quarter down 22 percent or more, illustrating both the enthusiasm and uncertainty of investors.
Looking ahead, U.S. IPO activity is expected to remain positive into Q4’25, with a resolution to the government shutdown, investors favoring offerings backed by strong fundamentals, clear profitability paths and sector resilience amidst a selective risk appetite.
Q3’25 highlights
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No. of IPOs(a)(b) and gross proceeds (US$B)
The below data includes five direct listings, each closed in Q3’23, Q4’23, Q3’24, Q1’25, Q2’25 respectively
Tech takes the ticker
Driven by investor enthusiasm for AI stocks, the TMT sector rebounded in the third quarter. The sector saw the number of IPOs rise 90 percent, while gross proceeds soared 215 percent to $4.1 billion thanks to a handful of larger deals. While returns were spotty due to ongoing volatility, the sector managed to eke out an average return of 18.6 percent over the quarter.
It was a similar story for the financial services sector. Deal count in the sector reached its highest point since Q4’21 and values rose from a healthy $3.6 billion in Q2 to $6.2 billion in Q3. Like TMT, the financial services sector was led by two megadeals, yet both stocks sank nearly 30 percent by the end of the quarter.
At the end of the quarter, it was the Industrial Manufacturing sector that delivered the strongest average returns. Boasting a handful of big-name debuts, the sector raised $2.9 billion and delivered an average return of 68 percent.
IPO markets are selectively open – and outside of key hot sectors like AI, investors are rewarding those companies coming to market with strong deal stories, transparent data and a proven path to profitability. It might be tempting to rush to market while the going is good, but don’t underestimate the importance and value of proper capital markets readiness.
Shari Mager
Partner and U.S. National Leader, Capital Markets Readiness, KPMG LLP
US IPO performance by sector - Average Q2’25 returns(a)(b)
VC and PE dive back in
Venture Capital and Private Equity sponsors certainly seemed to believe that IPO markets had reopened – selectively, at least. Public listings jumped more than 60 percent quarter-over-quarter, while exit value of public listings nearly doubled to $46.2 billion. The hope is that this increased liquidity will see capital recycled back into VC.
On the PE side, deal counts more than doubled from five in Q2 to 13 in Q3. Meanwhile, capital invested increased 532 percent to $5.9 billion, reflecting renewed valuation optimism. While the strength of the quarter shows growing investor confidence, our conversations with PE leaders indicate that many are recalibrating their strategies, prioritizing resilient sectors such as AI and mega-cap tech to mitigate trade uncertainty and protect portfolio value.
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
A mixed bag of signals
Predicting economic growth has never been easy. But this year is proving more difficult than most. On the one hand, markets aren’t acting the way they have in the past. In Q3, volatility plummeted, interest rates fell and markets hit new highs. Yet consumer confidence decreased as inflation expectations increased and labor uncertainty peaked.
On the other hand, gaps in the data due to the U.S. Government shutdown are obscuring visibility into the key trends and indicators that investors and economists rely upon. Compounded by the ongoing uncertainty of the current trade and tariff environment, many private market owners and investors are struggling to time their IPO strategy appropriately.
Given the potential for volatility – both positive and negative – our advice to clients has been to remain prepared. Significant opportunities will almost certainly emerge in this market. IPO candidates should be ready to act.
Outlook for Q4’25
With tariff concerns easing, interest rates dropping and average valuations rising, all signs point towards ongoing strength in IPO activity through Q4 and into 2026. Strong investor interest, solid deals and a healthy pipeline of candidates suggest the momentum seen in Q3 will continue. In particular, expect to see heightened activity from the technology sector as demand for AI and cloud computing companies persists. Various sectors may be impacted – in different ways – as the current U.S. administration pushes for more deregulation.
That being said, some level of volatility remains and there are growing concerns that a bubble may be forming around AI-related stocks and vehicles. In this environment, the success of U.S. IPO markets will largely depend on investor demand, valuation discipline and resilience to macro and organization-level volatility, particularly around trade and tariffs.
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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