After years of passive activity and investor uncertainty, the U.S. IPO market began making a comeback in the first half of 2025. We are past the presidential inauguration, inflationary pressures have gradually eased, and while the Federal Reserve has maintained a cautious stance, several successful IPOs in the first half of the year have encouraged both potential issuers and investors to act.

In this article, we look at how the U.S. public markets performed in the first half of 2025 compared with prior periods, and we provide our thoughts on how these trends may continue to shape the capital markets through the rest of the year and beyond.

IPOs by Volume and Value

There were 165 IPOs in the U.S. public markets in the first half of 2025. This was 76% higher than the 94 IPOs in the first half of 2024 and is estimated to be 47% higher than the total number of IPOs in 2024 when annualized for the full year of 2025. Average coffering proceeds during the first half of 2025 was $164.3 million, which is consistent with deal sizes seen during 2024.

The average number of IPOs over the last 20 years was 255 per year (216 per year when excluding outliers during the 2008-2009 financial crisis and the SPAC boom in 2020-2021). The 165 IPOs in the first half of 2025 (330 IPOs when annualizing for comparison purposes) is a striking improvement over the number of IPOs in the past three years.

IPOs by Volume (2000 – 2025)

* The first half of 2025 had 165 IPOs and is annualized to 330 for comparison purposes.

IPOs by Industry

The table below shows the IPOs in the first half of 2025 by industry.

SPACs

SPACs made a significant splash in the IPO market, accounting for nearly 37% of all IPOs in the first half of 2025 compared to 26% in 2024. This signals that investor attitude toward alternative listing mechanisms is making a comeback after a steep decline since the SPAC boom in 2020-2021. The uptick in SPAC IPOs has been driven in part by political and economic uncertainty behind tariffs and the job market – SPACs provide a public-ready investment vehicle for companies looking to IPO as conditions stabilize, and recent rule changes have increased regulatory clarity and investor protection, resulting in a more mature investor environment. The SPAC market is expected to continue its trajectory of maturity and adaptation through these improvements in corporate governance, disclosures, deal structuring, and risk mitigation.

Technology, Media, & Telecommunications (TMT)

TMT companies played a major role in the IPO market during the first half of 2025, accounting for 15% of the IPOs in the first half of 2025, which is consistent with 2024. Of the 24 TMT IPOs during the first half of 2025, 13 were software and IT services companies. This sector has also experienced outsized tailwinds from the recent performance of data and analytics companies such as Palantir (up almost 600% over the past year), and technology companies such as Western Digital, Nvidia, and Microsoft have continued significant upward trajectories. Looking ahead, companies with a clear AI strategy aimed at boosting efficiency, innovating products or services, or improving customer experiences are seeing heightened investor interest.

Industrial, Manufacturing, & Engineering (IME)

IME companies made a jump in the IPO market during the first half of 2025, accounting for 11% of the IPOs in the first half of 2025. Anticipated deregulation of onshore production and economic reshoring in response to tariff threats is expected to continue driving investment in IME companies through 2025 and into 2026.

Investors are also expecting a surge in development because of increased foreign direct investment in U.S. industrial and energy sectors. In May 2025, the White House announced a $600 billion investment agreement with Saudi Arabia, and in July 2025, the White House announced $550 billion of committed investment from Japan. These investments are expected to fund major development projects within the United States focused on energy infrastructure, AI datacenters, semiconductor manufacturing and research, commercial and defense manufacturing, and more.

Under the terms of the Strategic Trade and Investment Agreement with Japan, the United States will retain 90% of the profits from this investment. These agreements provide U.S. industrial and manufacturing companies with a unique opportunity to benefit from key priorities of the current administration and significant new investment dollars, as well as from anticipated deregulation. As a result, we expect to see continued momentum in IME IPOs through 2025 and into 2026.

Consumer Products & Services (CPS)

CPS companies accounted for 7% of the 2025 IPOs so far, and we anticipate fewer total IPOs in this sector compared to 2024. Tariffs and tariff uncertainty has had a negative impact of varying proportions across CPS companies that rely on foreign-sourced products or supply chains. This has dampened investor appetite for CPS assets, as these companies are potentially subject to increased costs, reduced consumer spending, and supply chain disruptions.

Notably, the 2025 CPS IPOs consisted of specialty business services, security services, education and training services, retail, food and beverage, and others. While consumer spending remains high, the current geopolitical uncertainty has led investors to favor service-based businesses over pure consumer products businesses.

Pharmaceuticals & Life Sciences

Pharma and life sciences, including biotech, digital health, and medical devices, have accounted for a significantly reduced share of U.S. IPO activity in 2025. Biotech has been the most constrained subsector, as no biotech IPOs priced in Q2 2025, and only four life sciences IPOs were completed in the first half of the year, representing the lowest throughput in more than a decade.

Digital health also showed subdued IPO activity. Only six global IPOs were completed in the first half of 2025, including prominent listings by Hinge Health and Omada Health. Consistent with other sectors, AI-enabled products and services have received significantly more interest compared to non-AI peers.

By contrast, medical devices have emerged as the strongest subsector. Med tech listings in Q1 2025 included Beta Bionics and Kestra Medical Technologies, which each raised over $200 million. These deals significantly exceeded expectations and reflected robust investor demand.

As the year progresses, key indicators to observe include rising late-stage venture and PIPE financings in med tech firms, continued biotech M&A activity with elevated upfront valuations, and any regulatory shifts affecting biotech development timelines. Additionally, high profile potential listings, including Caris Life Sciences, Heartflow, and Medtronic’s anticipated spin-out of its diabetes business MiniMed, could act as catalysts for renewed life sciences IPO momentum.

IPO Outlook

The first half of 2025 proved that the public markets are open for business for companies that exhibit a strong operating history and compelling growth prospects. While investors’ aperture for risk may be widening, the public markets are still favoring well-managed assets with strong fundamentals. We believe that companies that prepare rigorously and position themselves strategically can find opportunities to thrive within this dynamic.

Looking ahead to the second half of the year, the outlook remains cautiously optimistic and holds potential for continued growth and revitalization of the IPO landscape. Investors remain watchful of macroeconomic signals, including future interest rate moves and global trade developments, but the foundation for continued IPO momentum appears to be in place.

We continue to expect IPO volume and value throughout 2025 to surpass the preceding three years. SPACs continue to fill a need, as they provide a fast track to public markets while companies evaluate geopolitical and macroeconomic conditions. We expect technology and industrial/energy sectors, and particularly those in AI, to continue leading the growth in IPOs, while consumer products and pharmaceuticals face larger hurdles in the current market environment.

Preparation is key to a winning IPO in this market. Understanding market dynamics, refining your equity story, and timing your IPO carefully can make all the difference.

*Russell Frank contributed to this article