The window for tech IPOs may be sneaking back open after slamming shut during Trump tariff market turmoil earlier this spring.
Shares of Hinge Health were trading nearly 4% higher Friday morning, after gaining 17% on the health-tech company's stock market debut. Also debuting Thursday was MNTN an advertising technology company that saw its stock rocket more than 60% higher in from its IPO price of 16. MNTN stock was up more than 10% at 29.24 in recent action on the stock market today.
The successful debuts come a week after crypto and stock trading platform eToro Group went public in an upsized offering shares are ahead 28% from the company's first-day closing price.
"The strong aftermarket performance of these and other recent tech IPOs, like CoreWeave, ServiceTitan, Rubrik, and Reddit, indicate investor appetite for tech IPOs, especially for companies with solid financials and growth prospects," Greg Martin, managing director at Rainmaker Securities, told IBD in an email.
The successful debuts indicate a potential reopening of the IPO window, Martin added, "with some caveats."
Those caveats include that companies are often going public at lower valuations than they received from private venture capital investors during frothier times. Hinge Health's IPO, for instance, gives it a roughly $3 billion public valuation. In 2021, the digital physical therapy provider raised venture funding at a $6 billion valuation.
"This trend suggests that while the IPO window is reopening, companies may need to adjust expectations," Martin wrote.
IPO Market Restart?
Venture capital-backed tech startups have been slow to go public since the 2021 bull market faded. Higher interest rates depressed valuations for some so-called unicorn startups. There was hope among investors, however, that 2025 would see more major debuts.
The market action in late March and into April dampened much of that enthusiasm, however.
The Nvidia-backed AI startup CoreWeave went public in late March to a somewhat tepid initial response – before a big recent rally.
A week after the CoreWeave IPO, President Donald Trump's "Liberation Day" tariffs rattled markets. Big prospective IPO names put their plans on hold. That included buy-now-pay-later firm Klarna and ticketing website StubHub.
But the overall stock market has picked up in recent weeks, helped especially by a deal with China that significantly lowered Trump's China tariffs.
Coming into this week, Renaissance Capital's IPO Index had outperformed the S&P 500 for five straight weeks, according to a Sunday blog post from Renaissance Capital Chief Executive Bill Smith. The index does not include CoreWeave stock, which has soared 151% in May.
Smith added, however, that three things need to happen for a "real pickup" in IPO activity.
"Volatility needs to stay in check," he wrote. "Investors and issuers need reassurance that this stability will last." Smith also said "more sizable IPOs need to perform well" noting that "new issuers need to prove they can hold up after the listing."
"More sizable IPOs need to file," he added, saying, "An active pipeline will support an active calendar."
Tech IPO Market Names To Watch
To that final point, online banking startup Chime filed for an IPO that Renaissance Capital estimates could raise up to $1 billion. Design software company Figma also submitted initial IPO paperwork last month.
It remains to be seen when delayed tech IPOs like Klarna and StubHub could reemerge. Klarna reported a 15% increase in revenue to $701 million earlier this week. But the Swedish company also saw its net loss for the March quarter reach $99 million, compared to a $47 million loss a year earlier. Its financial release did not include any update on the company's IPO plans.
Meanwhile, tariff volatility may not be over just yet. Trump renewed threats for stiffer tariffs on the EU. The president also said Apple could face tariffs of "at least 25%" if it doesn't shift iPhone production to the U.S.
The benchmark S&P 500 declined 0.4% in recent action and is testing its 200-day line. The Renaissance Capital IPO ETF is down a fraction as well.
Martin of Rainmaker Securities said that broader macroeconomic conditions will be a key factor for whether the IPO market further heats up.
"Stabilizing inflation and declining interest rates have created a more favorable environment for IPOs," Martin told IBD in an email. "However, ongoing concerns about trade policies and potential economic slowdowns could impact investor sentiment."
