Goldman Sachs Banker Sees ‘Massive’ Potential for 2025 IPO Uptick

A senior Goldman Sachs banker believes 2025 will see more technology companies go public.

The number of initial public offerings (IPOs) in the tech sector will “likely more than double” next year, with the rate of companies listing by the year’s end coming closer to an annual average of about 34, Will Connolly, the banking giant’s head of technology equity capital markets, said at a recent conference.

“There’s a massive population of big, scaled companies in tech that are IPO candidates, and there’s a lot of demand to put money to work,” said Connolly, whose comments at the bank’s Private Innovative Company Conference in Las Vegas were reported Monday (Nov. 25) by Bloomberg News.

“The question is how quickly can people recalibrate to a more active IPO market,” he added.

As Bloomberg noted, the market for tech IPOs has been tepid since the pandemic, as startup valuations have slumped. Companies raised a record $160 billion in 2021 before falling to totals below the $3.1 billion average recorded in the pre-COVID decade, Bloomberg’s figures showed.

However, the report added, the performance of high-profile tech listings in the last two years suggest there’s a desire among investors for “quality names” such as chipmaker Arm and Indian food-delivery startup Swiggy.

The market is nearing an “inflection point where companies will line up to go” public, Connolly said. “We’ve seen an acceleration of companies getting ready.”

His comments are keeping in line with remarks made last month by Nasdaq CEO Adena Friedman, who told attendees at a conference held by Axios that she believes IPOs will regain their momentum in the coming year.

At the same time, last week saw reports that many FinTech companies aren’t ready to go public, in spite of the much-heralded IPO by Swedish buy now, pay later company Klarna, planned for the first half of next year.

For example, Hiroki Takeuchi, CEO of online payments startup GoCardless, said at a recent conference that his company, which was last valued at over $2 billion, isn’t ready to go public. He said he sees an IPO as more of a milestone on a bigger journey, rather than a destination.

“The markets have been challenging over the last few years,” Takeuchi said, per a CNBC report, adding that the company is focused on building a better business and “the rest will follow” if GoCardless reaches that goal.