IPOs & Equity Financing Rebound Mid-2025: Sponsor Exits, Private Deals & Convertibles Surge

Market Rebound Driven by Macroeconomic Tailwinds and Sponsor Exits

The IPO market endured a freeze in spring 2025 largely as a consequence of uncertainty over US tariff policies, which compressed deal flow and pushed companies to postpone outings. But by mid-2025, conditions had improved: equity capital market (ECM) deal volume—including IPOs, follow-ons, and convertibles—grew ~7% year-over-year in the first half of the year. [Primary][10] In the US, Q2 IPOs alone saw a ~34% increase in funds raised versus Q1, with 59 IPOs raising ~US$15.0 billion. [3] This confirms a reopening of the IPO window, though still fragile given volatility and macro uncertainty. [3][9]

Private Markets: Longevity and Dry Powder

Data show that companies are staying private longer: the median age at IPO is now ~10.7 years, up significantly from ~6.9 years a decade ago. [4][Primary] Institutional investor appetite for private assets remains high too: 66% plan to increase private allocations over the next five years. [Primary][4] Private equity and venture capital still hold sizable uncommitted capital—~US$2.6 trillion as of mid-2024—and many PE-owned assets are maturing, setting up a potential wave of IPOs from sponsor exits. [Primary][10]

Follow-Ons & Convertibles: Flexible Capital in Uncertain Times

With interest rates still elevated and straight-debt expensive or inflexible, companies are turning to follow-on equity offerings and convertibles as strategic tools. Follow-on volume hit its highest monthly level since late 2021 in September 2024 in the US, and US convertible bond issuance in 2025 has already exceeded US$108 billion, surpassing previous records including the 2020 high. [Primary][8][7]
Sector-wise, tech and consumer are among the leaders in convertibles issuance; North America accounted for over half of global convertible issuance in Q2 2025, led by large (>US$1 billion) deals. [8][Additional Source]

Geographic and Sectorial Shifts

Regionally, growth in IPO activity has been strongest in Greater China and US, while Europe saw both volume and proceeds decline significantly in H1 2025. [2][3] Asia-Pacific and the Middle East also showed strong gains in IPO volumes and proceeds. [2] Sectors leading the resurgence include technology and healthcare; industrials and financials are expected to play larger roles in upcoming IPOs, and company size is trending upward, especially among sponsor-backed issuers. [Primary][10][3]

Strategic Implications and Risks

• Companies considering IPOs should prioritize strong growth narratives, profitability paths, and clean regulatory exposure—especially in trade/tariff-sensitive sectors.
• Financial sponsors with aging portfolios are under pressure to execute exits—including via public markets—especially as IPO appetite returns, but valuations may be reset relative to pandemic peaks.
• Issuers and underwriters will need to focus on timing, deal structure and size: larger, established firms are more likely to succeed given investor selectivity.
• Regulatory uncertainty (tariffs, listing rules, accounting oversight) and macro shocks (inflation, interest rates, geopolitics) remain tail-risks that could quickly retrench this rebound.

Open Questions

• Will H2 2025 maintain momentum, or will macro-policy shocks (interest rate moves, trade policy shifts) undermine investor confidence?
• How much supply will financial sponsors contribute via exits, and will IPO valuations align with current private-market expectations?
• Will Europe’s IPO market recover in line with expectations, or will global capital continue to flow toward US and Asia-Pacific listings?
• How sustainable is the recent performance of convertibles, especially as coupon costs increase or equity valuations fluctuate?