Tech Companies Shunning IPOs in a Changing Market

The appetite to pursue IPOs among major technology companies has diminished significantly, with many opting to remain private despite their rapid growth and success.

FinTech magazine’s Natalia Elliot reports that this trend reflects shifts in capital allocation, corporate strategy, and investor expectations.

This year, high-profile firms such as SpaceX, OpenAI, and Stripe continue to expand, but without retail investor participation, part of a broader decline in initial public offerings.

Historically, the technology sector experienced cycles of intense IPO activity, most notably during the dot-com era of the 1990s. These cycles have often mirrored broader economic conditions, with downturns such as the 2008 financial crisis prompting withdrawals from public markets.

A post-pandemic surge in IPOs during 2021 has since slowed sharply, driven in part by trade barriers and evolving investor priorities.

Current conditions have strengthened the appeal of private funding, with large pools of capital in private equity and credit markets providing alternatives to public listing and enabling firms to avoid the regulatory scrutiny and short-term pressures of the public sphere.

The decline in IPO activity is evident in market data. In 2021, 126 firms were listed on the London Stock Exchange, many of which were from the tech sector; in contrast, only 15 have done so as of 2025.

Major players, such as Stripe and OpenAI, have achieved valuations of US$91.5 billion and US$300 billion, respectively, without undertaking public offerings, reflecting the increasing viability of private financing.

Notably, IPO performance can be volatile, as illustrated by Figma’s sharp post-listing share fluctuations despite strong revenue growth.

For corporate counsel, the trend illustrates an evolving capital formation environment. Counsel for companies that prioritize private fundraising and M&A strategies over IPOs must consider the implications of private equity dynamics, regulatory requirements, and market conditions when guiding clients on growth and exit strategies.