Why Tech Giants are Shunning Public Markets and IPOs in 2025

The technology sector’s shift away from the public markets has become stark in recent years, especially when compared to the heyday of IPOs in the 1990s.

Fuelled by the dot-com boom, the 90s set new records for growing tech firms trading on the stock exchange. The market, however, has failed to maintain that level of activity since.

The waves of IPOs have ebbed and flowed with the global economy, increasing in number at times of economic prosperity and dwindling during moments of financial difficulty.

The 2008 financial crisis, for example, saw a complete retreat from the stock market, as newer companies looked to consolidate and protect their value internally.

Then, after an initial period of intense activity in 2021, the latent economic effects of the COVID-19 pandemic eventually engendered a similar trend in the stock market.

Now, in 2025, with tech unicorns springing up more frequently than ever before, IPOs are still yet to truly bounce back.

While this is partly the result of the economic turbulence caused by international tariffs, it also signals a broader trend in global economics and business strategy.

The state of IPOs today

In 2021, 126 companies went public on the London Stock Exchange, with many of those either tech or fintech firms.

This year, just 15 have taken the plunge. That represents one of the LSE’s worst years in three decades.

"Public market investors are now more focused on a company's profitability and sustainable growth rather than just prospective growth," says John Blank, who is the Chief Equity Strategist at Zacks Investment Research.

The change contrasts sharply with the speculative growth focus that dominated earlier technology booms.

With the UK – and much of the wider world – laser-focused on the AI boom, this seems unusual.

The private market boom

If you dig a little deeper into the stagnation of the public markets, you’ll quickly see that the practice of private funding has exploded in recent years.

The State Street Private Equity Index now represents more than US$5.7tn in value, more than five times its committed capital of US$1.1tn when it launched in 2007.

"The substantial growth in capital managed by large private equity and private credit firms provides a viable alternative to public market funding," John explains.

This year has also seen several high-profile acquisitions and bilateral investments between large tech companies, such as the ongoing relationships OpenAI holds with firms like Microsoft and SoftBank.

This abundance of private capital has reduced pressure on companies to endure the scrutiny of quarterly earnings calls and increased regulation that comes with public listing.

The billion-dollar hold-outs

SpaceX exemplifies this trend, with Elon Musk's aerospace company reportedly in talks to sell insider shares at a valuation of roughly US$400bn – exceeding McDonald's and Boeing combined – without ever listing publicly.

Payments giant Stripe also recently completed a tender offer valuing the firm at US$91.5bn, while OpenAI secured a US$300bn valuation in March following fresh funding led by SoftBank.

These companies have achieved massive scale and revenues whilst maintaining privacy and avoiding public market volatility.

Tim Levene, CEO of Augmentum Fintech, Europe's largest fintech fund, believes that consolidation, rather than public listings, will be the dominant trend in the short term.

"The likely exit for a lot of our portfolio companies will be mergers and acquisitions, rather than IPO," he explains.

What happened when Figma went public?

The volatility facing technology IPOs is perhaps best illustrated by Figma's turbulent public market debut this summer.

The San Francisco-based design software company's shares surged 250% following its July IPO, reaching US$142 per share by 1 August, 2025.

However, the euphoria proved short-lived, with shares plummeting 60% from their peak by September 19th following the company's first post-IPO earnings report.

"Our performance this quarter highlights the strength of our business and the critical value of design," says Figma’s CFO, Praveer Melwani, despite the market's jumpiness.

The company delivered 41% revenue growth to US$249.6m in the second quarter, but forecast slower 33% growth for the third quarter.

Figma's dramatic price swings stemmed from multiple factors: only 8% of shares were initially sold to the public, creating artificial scarcity, whilst 25% of insider lockups expired in early September, flooding the market with additional supply.

The company's price-to-sales ratio of 31 times – more than four times Adobe's ratio of 7 – speaks to the premium valuations that can make technology stocks vulnerable to sharp corrections.

"There were no big surprises in Figma's second-quarter results as it continues to deliver robust growth," says Arjun Bhatia, an analyst at William Blair.

Still, the stock's extreme volatility goes to show how challenging the public markets have become for newly-listed technology companies. While results can still be very positive, it seems as though many boards are becoming more conservative in their approaches.

The future of the IPO

Experts are warning that the IPO slowdown may prove more enduring than previous cycles.

Tariff-induced obstacles for smaller companies, slower economic growth and persistent market volatility suggest traditional IPO patterns may not return soon.

"This is likely to get worse, not better now," John suggests.

The transformation leaves retail investors with diminished access to high-growth technology companies, potentially reshaping how ordinary savers can participate in tomorrow's business successes.