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The IPO market is officially back. With 100 companies having already gone public this year, 2025 is on track to match or exceed 2024's 225 IPOs, continuing the steady recovery from 2023's low of just 154. But unlike the manic rush of 2021, this revival is built on companies that waited years to prove they could actually turn a profit.
The turnaround represents a return to IPO fundamentals after years of extremes. In 2021, more than 1,000 companies went public, double even the dot-com bubble's peak. But the speculative frenzy ended badly. The inevitable correction slammed the window shut, leaving companies to hunker down in private markets longer than ever before. Now they're emerging battle-tested and profitable, suggesting this IPO recovery might have staying power, unlike the speculative bubbles of the past.
"Any way you look at it, it has been a bonanza," said Len Sherman, a Columbia Business School professor who tracks the industry. "But they are starting from a very low basis. We are emerging from a nuclear winter of 2022 and 2023."
That nuclear winter followed 2021's record-breaking excess, fueled by zero interest rates and the SPAC boom. Special purpose acquisition companies — essentially blank-check vehicles that raise money to buy other companies — accounted for 60% of that year's IPOs, allowing virtually any business to go public through a merger rather than the standard process. Unlike conventional IPOs, which require extensive financial disclosure and regulatory scrutiny, SPACs offered a fast track to public markets with more relaxed oversight.
The reckoning for that laissez-faire attitude was swift and severe. IPOs that year averaged a 10% decline in the aftermarket — the worst performance in over a decade — with 64% of new listings trading below their offer price by year-end, according to Barron’s. When reality set in (and interest rates went up), the IPO party petered out, leaving just 180 IPOs over the next two years combined.
But that forced hibernation may have been a blessing in disguise, according to Sherman. Companies that might have rushed to market during the bubble had time to mature their business models and prove they could make money. The result: about 60% of 2025's IPOs are profitable at the time of their debut, compared to just 20% during both the dot-com boom and 2021's SPAC-fueled frenzy.
The quality upgrade is evident in the types of companies going public. This year's crop includes profitable tech companies like stablecoin issuer Circle Internet, which was already generating revenue from interest on reserves backing its cryptocurrency. AI infrastructure provider CoreWeave had a partnership with Nvidia $NVDA and paying customers before going public. Even defense tech startups are arriving with government contracts in hand.
The shift reflects broader changes in private markets. Abundant private equity allowed companies to stay private for "an unprecedented long time," Sherman said, giving them runway to build sustainable businesses rather than rushing to public markets for survival capital.
The themes driving 2025's IPO class — AI, defense tech, crypto, and cloud infrastructure — reflect real market demand rather than speculative hype. These are sectors where companies can demonstrate clear revenue streams and growth prospects, not just compelling PowerPoint presentations.
But there are still signs that 2021 isn't that far gone. SPACs are having their busiest year since the 2021 boom, with companies like Tether and Kodiak Robotics choosing blank-check mergers over traditional IPOs. And the spectacular day-one pops are back — Circle's 168% surge, Airo's 140% jump, and Newsmax's wild 735% gain and subsequent fall echo the frenzied debuts of the previous bubble.
The question now is whether this fundamentals-focused revival can sustain itself. With 15 companies already raising at least $100 million this year and major names like Figma potentially in the pipeline, 2025 could mark the beginning of a new, more mature phase for public markets.
Still, Sherman cautions against getting too comfortable. "This market is always cyclical and there tends to be a herd mentality that shows up in the IPO market," he said. "I hope we can enjoy it while we can until the next inevitable bubble."