IPO market boost from Circle 500% surge, VCs say drought could also be ending

For over three years, enterprise capital firms have been waiting for this moment.

Tech IPOs got here to a virtual standstill in early 2022 attributable to soaring inflation and rising rates of interest, while big acquisitions were mostly off the table as increased regulatory scrutiny within the U.S. and Europe turned away potential buyers.

Though it’s too soon to say those days are entirely previously, the primary half of 2025 showed signs of momentum, with June specifically producing much-needed returns for Silicon Valley’s startup financiers. In all, there have been five tech IPOs last month, accelerating from a monthly average of two since January, in line with data from CB Insights.

Highlighting that group was crypto company Circle, which greater than doubled in its Latest York Stock Exchange debut on June 5, and is now up sixfold from its IPO price for a market cap of $42 billion. The stock got a giant boost in mid-June after the Senate passed the GENIUS Act, which might establish a federal framework for U.S. dollar-pegged stablecoins.

Enterprise firms General Catalyst, Breyer Capital and Accel now own a combined $8 billion price of Circle stock even after selling a fraction of their holdings within the offering. Silicon Valley stalwarts Greylock, Kleiner Perkins and Sequoia Capital are set to soon take advantage of Figma’s IPO, after the design software vendor filed its public prospectus on Tuesday. Since its $20 billion acquisition agreement with Adobe was scrapped in late 2023, Figma has been some of the hotly anticipated IPOs in startup land.

It’s “refreshing and something that we have been waiting for for a very long time,” said Eric Hippeau, managing partner at early-stage enterprise firm Lerer Hippeau, regarding the exit environment. “I’m undecided that we’re confident that this is usually a sustained trend yet, but it surely’s been very encouraging.”

One other positive sign for the industry the past couple months was the performance of artificial infrastructure provider CoreWeave, which went public in late March. The stock was relatively stagnant for its first month available on the market but shot up 170% in May and one other 47% in June.

For enterprise firms, long considered the lifeblood of dangerous tech startups, IPOs are essential with a purpose to generate profits for the university endowments, foundations and pension funds that allocate a portion of their capital to the asset class. Without handsome returns, there’s little incentive for limited partners to place money into future funds.

After a record 12 months in 2021, which saw 155 U.S. venture-backed IPOs raise $60.4 billion, in line with data from University of Florida finance professor Jay Ritter, yearly since has been relatively dismal. There have been 13 such offerings in 2022, followed by 18 in 2023 and 30 last 12 months, collectively raising $13.3 billion, Ritter’s data shows.

The slowdown followed the Federal Reserve’s aggressive rate-hiking campaign in 2022, meant to slow crippling inflation. Because the lower-growth environment prolonged into years two and three, enterprise firms faced increasing pressure to return money to investors.

In its 2024 yearbook, the National Enterprise Capital Association said that even with a 34% increase in U.S. VC exit value last 12 months to $98 billion, that number is 87% below the 2021 peak and lower than half the typical for the 4 years from 2017 through 2020. It is a troubling dynamic for the 58,000 venture-backed corporations which have raised a complete of $947 billion from investors, in line with the annual report, which is produced by the NVCA and PitchBook.

“This backlog of liquidity drought risks making a ‘zombie company’ cohort — businesses generating operational money flow but lacking credible exit prospects,” the report said.

Apart from Circle, the newest crop of IPOs mostly consists of smaller and lesser-known brands. Health-tech corporations Hinge Health and Omada Health are valued at about $3.5 billion and $1 billion, respectively. Etoro, an internet trading platform, has a market cap of just over $5 billion. Online banking provider Chime Financial has the next profile due largely to a years-long marketing blitz and is valued at near $11.5 billion.

Meanwhile, the very best valued private corporations like SpaceX, Stripe and Databricks remain on the sidelines, and AI highfliers OpenAI and Anthropic proceed to lift massive amounts of money with no intention of going public anytime soon.

Still, enterprise capitalists told CNBC that there are many corporations with the financial metrics to be public, and that more of them are readying for the method.

“The IPO market is beginning to open and the VC world is cautiously optimistic,” said Rick Heitzmann, a partner at enterprise firm FirstMark in Latest York. “We’re preparing corporations for the subsequent wave of public offerings.”

There are other ways to earn money within the meantime. Secondary sales, a process that involves selling private shares to recent investors, are on the rise, allowing early employees and investors to get some liquidity.

After which there’s what Mark Zuckerberg is doing, as he tries to position his company at the middle of AI innovation and development.

Last month, Meta announced a $14 billion bet on Scale AI, taking a 49% stake within the AI startup in exchange for poaching founder Alexandr Wang and a small group of his top engineers. The deal effectively bought out half of the stock owned by investors, leaving them with the chance to earn money on the remaining of their holdings, should a future acquisition or IPO happen.

The deal is a giant win for Accel, which led Scale AI’s Series A round in 2017, and is poised to earn greater than $2.5 billion within the transaction. Index Ventures led the Series B in 2018, and Peter Thiel’s Founders Fund led the Series C the next 12 months at a valuation of over $1 billion.

Investors now hope the Federal Reserve will move toward a rate-cutting campaign, though the central bank hasn’t committed to 1. There’s also ongoing optimism that regulators will make going public less burdensome. Last week, Reuters reported, citing sources acquainted with the matter, that U.S. stock exchanges and the SEC have discussed loosening regulations to make IPOs more enticing.

Mike Bellin, who heads consulting firm PwC’s U.S. IPO practice, said he anticipates a diversity of IPOs across sectors within the second half of the 12 months. In accordance with data from PwC, pharma and fintech were amongst essentially the most energetic sectors for deals through the tip of May.

While the recent trend in IPO activity is an encouraging sign for investors, potential roadblocks remain.

Tariffs and geopolitical uncertainty delayed IPO plans from corporations including Klarna and StubHub in April. Neither has provided an update on after they plan to debut.

FirstMark’s Heitzmann said the trail forward is “in no way clear,” adding that he desires to see a robust quarter of economic stability and growth before confidently saying that the market is wide open.

Moreover, apart from CoreWeave and Circle, recent tech IPOs have not had big pops. Hinge Health, Chime and eToro have seen relatively modest gains from their offer price, while Omada Health is down.

But virtually any activity beats what VCs were experiencing the previous couple of years. Overall, Hippeau said recent IPO trends are generally encouraging.

“There’s beginning to be type of light at the tip of the tunnel,” Hippeau said.

WATCH: Uptick in VC-backed startup deals