Investment Bankers Banking on an IPO Turnaround in 2025

Investment bankers are reportedly preparing for a dealmaking uptick in equity capital markets this year.

Optimism among Wall Street’s banks is being fueled by a promising stable of initial public offerings (IPOs) by high-profile companies, Reuters reported late Friday (Jan. 10).

Among these companies are liquified natural gas producer Venture Global, medical supplier Medline, and cybersecurity firm Sailpoint, the report said, citing sources familiar with the matter.

Rising capital markets activity, fueled by greater economic confidence, is expected to bolster several of these private equity-backed companies, Reuters added.

Private equity outfits have struggled to sell or list portfolio companies in the last two years, the report said, as steep interest rates and rocky market conditions hampered dealmaking.

“Many of the companies owned by private equity firms have become sizable,” Arnaud Blanchard, global co-head of equity capital markets for Morgan Stanley, told Reuters.

“Sponsors know it may take a while to complete a full exit, so they are becoming active now, early in the cycle.”

Other companies that could go public this year include payments/buy now, pay later (BNPL) firm Klarna, and artificial intelligence (AI) cloud company CoreWeave, and FinTech Chime, the report added. Chime, sources told Reuters, confidentially submitted paperwork for its IPO last month.

“Momentum may be on the side of FinTechs in the current year,” PYMNTS wrote last month. “First there’s the momentum of the overall markets, which may be readying for the incoming presidential administration, which some investors and executives expect to be arguably ‘business friendly’ in terms of regulations, crypto and taxes (which, of course, impact profits, and profits in turn impact valuations).”

In addition, that report said, lower interest rates could also spark more activity on lending platforms such as Upstart.

According to the Reuters report, the biggest private equity firms have grown more confident about taking their companies public. When America’s banking giants release their earnings in the week ahead, investors will be focused on their capital market forecasts following a surge of activity in that space last year.

Meanwhile, last week saw a report by the Financial Times that America’s largest startups were raising capital in private markets so that they can delay launching IPOs.

Among these companies are Databricks raising $10 billion in December, SpaceX raising $1.25 billion in November and OpenAI, which took in a landmark $6.6 billion in October, allowing it to hold off going public beyond this year.