Nasdaq CEO Expects IPOs to Pick Up Steam in 2025

While this year hasn’t seen an initial public offering (IPO) rebound, the CEO of Nasdaq reportedly isn’t surprised.

That’s according to a report Sunday (Oct. 27) by TechCrunch, citing Adena Friedman’s comments at a recent Axios event.

She said that while the public markets have seen a banner year, not every company is benefiting, including those with smaller valuations.

“It’s a little bit of a tale of two cities,” Friedman said. “Large cap, which has done very well, and you can kind of see in the S&P 500, you have a 10% kind of valuation increase in a large cap. But if you look at the small cap index, they’re actually down 10%.”

And many late stage companies, she added, are not fully ready for an IPO. They want to debut after a strong year, which has been tougher with interest rates high.

“They want to have 12 months of really strong performance before they start to think about coming out,” Friedman said. 

“The cost of capital environment has made it so that companies, those that are relying on capital to continue to grow their businesses, are definitely trading at a discount.”

She added that she thinks IPOs will regain their momentum next year, noting that some recent public offerings in the biotech sector have demonstrated an appetite for younger companies.

Among them were Tempus AI, which raised $410 million when it went public in June, and Bicara Therapeutics raising $362 million last month. However, the TechCrunch report noted that some of the biotechs that went public this year saw their share prices dip following their IPO.

As covered here earlier this month, many higher-profile startups – including Stripe, OpenAI and SpaceX — have been choosing to remain private longer, giving employees liquidity by conducting secondary share sales instead of turning to the public markets.

“Secondaries are the best of both worlds. Companies can stay private for longer and investors that want liquidity can get it,” Emily Zheng, VC analyst at PitchBook told Reuters.

Meanwhile, startups that do want to go public in the U.S. — and in Great Britain — are held back by regulators, JPMorgan Chase CEO Jamie Dimon argued recently.

Speaking to Bloomberg Television, Dimon said increasing expenses from litigation and regulatory filings have caused the number of IPOs to flag at the same time that public market valuations have surged.

“I think it would be incumbent for us to make it easier and cheaper to go public, and we have to figure out a way to do that,” Dimon said.