U.S. Tech IPO Market Revives, Circle Stock Surges 600% Post-GENIUS Act

The U.S. technology IPO market has shown signs of recovery after a three-year downturn, bringing a glimmer of hope to venture capitalists. The market, which had been stagnant since early 2022 due to high inflation and aggressive interest rate hikes, has seen a resurgence in the first half of 2025, particularly in June. This month witnessed a wave of initial public offerings (IPOs) from startups, providing much-needed returns to Silicon Valley investors.

One of the standout performers in this IPO wave is Circle, a cryptocurrency company. Circle's stock price doubled on its first day of trading on the New York Stock Exchange on June 5, and it has since surged sixfold from its initial offering price, reaching a market capitalization of 420 billion. This surge was further boosted in mid-June when the U.S. Senate passed the GENIUS Act, establishing a federal regulatory framework for stablecoins pegged to the U.S. dollar. Venture capital firms General Catalyst, Breyer Capital, and Accel were among the biggest winners from Circle's IPO, collectively holding 80 billion in stock value even after selling some of their shares.

Another notable IPO is from Figma, a design software company. Figma submitted its IPO prospectus on Tuesday, becoming one of the most anticipated IPOs after its 200 billion acquisition deal with Adobe was terminated at the end of 2023. Early investors in Figma include Greylock, Kleiner Perkins, and Sequoia Capital.

The IPO market's revival is a welcome signal for venture capitalists who have been waiting for this moment. While it is too early to declare a sustained trend, the direction is encouraging. The IPO market is not only a crucial channel for venture capitalists to recoup their investments but also a means to showcase their investment performance to limited partners such as university endowments, charitable foundations, and pension funds.

In 2021, 155 venture-backed companies completed IPOs in the U.S., raising a total of 604 billion, marking the best year on record. However, the number of IPOs and the total amount raised have since declined, with only 13 companies in 2022, 18 in 2023, and 30 in 2024, raising a combined total of 133 billion. The National Venture Capital Association (NVCA) noted in its 2024 annual report that while the total value of U.S. VC exits grew by 34% to 980 billion in 2023, it was still 87% lower than the peak in 2021 and less than half the average of the four years from 2017 to 2020. The association warned that prolonged exit challenges could lead to an increase in "zombie companies"—firms with cash flow but unable to go public or be acquired. Currently, there are 58,000 venture-backed companies in the U.S. with a cumulative funding of 947 billion.

In addition to Circle and CoreWeave, other recent IPOs include Hinge Health, a health technology company valued at 35 billion, Omada Health valued at 10 billion, eToro, an online trading platform valued at 50 billion, and Chime Financial, an online banking service provider known for its extensive brand marketing. However, highly valued private technology companies such as SpaceX, Stripe, and Databricks remain on the sidelines, while AI stars OpenAI and Anthropic continue to raise funds through private financing, with no immediate plans to go public.

Despite the cautious optimism, venture capitalists remain vigilant. FirstMark partner Rick Heitzmann noted that the IPO market is opening up, and the venture capital community is actively preparing for the next wave of IPOs. In addition to IPOs, many firms are achieving partial liquidity through secondary market transactions, selling private shares to new investors and providing early employees and shareholders with financial returns.

Another significant example is Meta's substantial investment in AI company Scale AI. Meta announced last month that it would acquire 49% of Scale AI's shares for 140 billion, successfully recruiting founder Alexandr Wang and his core engineering team. This deal not only reshaped the AI industry landscape but also allowed early investors to partially exit. For instance, Accel, which led the Series A investment in 2017, is expected to gain over 25 billion from this transaction, with other investors including Index Ventures and Founders Fund.

Key variables for the future include whether the Federal Reserve will initiate a rate-cutting cycle. While there is market anticipation, the Federal Reserve has not made a clear commitment. Additionally, the U.S. Securities and Exchange Commission (SEC) is reportedly discussing with exchanges the possibility of relaxing listing regulations to lower the barriers for companies to go public.

PwC's U.S. IPO services leader Mike Bellin predicts that more companies from diverse sectors such as pharmaceuticals and fintech will go public in the second half of the year. However, the road to recovery remains uncertain. In April, companies like Klarna and StubHub postponed their IPO plans due to tariffs and geopolitical factors, and new timelines have yet to be announced. Heitzmann acknowledged that the market is still far from a full recovery, requiring a stable and robust economic quarter to regain confidence in the market's restoration.

While most new tech IPOs have shown modest performance, the recovery, albeit mild, is encouraging for venture capitalists who have weathered the storm. The managing partner of early-stage venture capital firm Lerer Hippeau expressed optimism, stating, "We finally see a glimmer of light."