IPO market gets boost from Circle’s 500% surge, sparking optimism that drought may be ending
Jeremy Allaire, CEO and co-founder of Circle Internet Group, the issuer of one of the world’s biggest stablecoins, and Circle Internet Group co-founder Sean Neville react as they ring the opening bell, on the day of the company’s IPO, in New York City, U.S., June 5, 2025.
NYSE
For over three years, venture capital firms have been waiting for this moment.
Tech IPOs came to a virtual standstill in early 2022 due to soaring inflation and rising interest rates, while big acquisitions were mostly off the table as increased regulatory scrutiny in the U.S. and Europe turned away potential buyers.
Though it’s too soon to say those days are entirely in the past, the first half of 2025 showed signs of momentum, with June in particular producing much-needed returns for Silicon Valley’s startup financiers. In all, there were five tech IPOs last month, accelerating from a monthly average of two since January, according to data from CB Insights.
Highlighting that group was crypto company Circle, which more than doubled in its New York Stock Exchange debut on June 5, and is now up sixfold from its IPO price for a market cap of $42 billion. The stock got a big boost in mid-June after the Senate passed the GENIUS Act, which would establish a federal framework for U.S. dollar-pegged stablecoins.
Venture firms General Catalyst, Breyer Capital and Accel now own a combined $8 billion worth of Circle stock even after selling a fraction of their holdings in the offering. Silicon Valley stalwarts Greylock, Kleiner Perkins and Sequoia Capital are set to soon profit from Figma’s IPO, after the design software vendor filed its public prospectus on Tuesday. Since its $20 billion acquisition agreement with Adobe was scrapped in late 2023, Figma has been one of the most hotly anticipated IPOs in startup land.
It’s “refreshing and something that we’ve been waiting for for a long time,” said Eric Hippeau, managing partner at early-stage venture firm Lerer Hippeau, regarding the exit environment. “I’m not sure that we are confident that this can be a sustained trend yet, but it’s been very encouraging.”
Another positive sign for the industry the past couple months was the performance of artificial infrastructure provider CoreWeave, which went public in late March. The stock was relatively stagnant for its first month on the market but shot up 170% in May and another 47% in June.
For venture firms, long considered the lifeblood of risky tech startups, IPOs are essential in order to generate profits for the university endowments, foundations and pension funds that allocate a portion of their capital to the asset class. Without handsome returns, there’s little incentive for limited partners to put money into future funds.
After a record year in 2021, which saw 155 U.S. venture-backed IPOs raise $60.4 billion, according to data from University of Florida finance professor Jay Ritter, every year since has been relatively dismal. There were 13 such offerings in 2022, followed by 18 in 2023 and 30 last year, collectively raising $13.3 billion, Ritter’s data shows.
The slowdown followed the Federal Reserve’s aggressive rate-hiking campaign in 2022, meant to slow crippling inflation. As the lower-growth environment extended into years two and three, venture firms faced increasing pressure to return cash to investors.
‘Backlog of liquidity’
In its 2024 yearbook, the National Venture Capital Association said that even with a 34% increase in U.S. VC exit value last year to $98 billion, that number is 87% below the 2021 peak and less than half the average for the four years from 2017 through 2020. It’s a troubling dynamic for the 58,000 venture-backed companies that have raised a total of $947 billion from investors, according to the annual report, which is produced by the NVCA and PitchBook.
“This backlog of liquidity drought risks creating a ‘zombie company’ cohort — businesses generating operational cash flow but lacking credible exit prospects,” the report said.
Other than Circle, the latest crop of IPOs mostly consists of smaller and lesser-known brands. Health-tech companies Hinge Health and Omada Health are valued at about $3.5 billion and $1 billion, respectively. Etoro, an online trading platform, has a market cap of just over $5 billion. Online banking provider Chime Financial has a higher profile due largely to a years-long marketing blitz and is valued at close to $11.5 billion.
Meanwhile, the highest valued private companies like SpaceX, Stripe and Databricks remain on the sidelines, and AI highfliers OpenAI and Anthropic continue to raise massive amounts of cash with no intention of going public anytime soon.
Still, venture capitalists told CNBC that there are plenty of companies with the financial metrics to be public, and that more of them are readying for the process.
“The IPO market is starting to open and the VC world is cautiously optimistic,” said Rick Heitzmann, a partner at venture firm FirstMark in New York. “We are preparing companies for the next wave of public offerings.”
There are other ways to make money in the meantime. Secondary sales, a process that involves selling private shares to new investors, are on the rise, allowing early employees and investors to get some liquidity.
And then there’s what Mark Zuckerberg is doing, as he tries to position his company at the center of AI innovation and development.
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Last month, Meta announced a $14 billion bet on Scale AI, taking a 49% stake in the AI startup in exchange for poaching founder Alexandr Wang and a small group of his top engineers. The deal effectively bought out half of the stock owned by investors, leaving them with the opportunity to make money on the rest of their holdings, should a future acquisition or IPO take place.
The deal is a big win for Accel, which led Scale AI’s Series A round in 2017, and is poised to earn more than $2.5 billion in the transaction. Index Ventures led the Series B in 2018, and Peter Thiel’s Founders Fund led the Series C the following year at a valuation of over $1 billion.
Investors now hope the Federal Reserve will move toward a rate-cutting campaign, though the central bank hasn’t committed to one. There’s also ongoing optimism that regulators will make going public less burdensome. Last week, Reuters reported, citing sources familiar with the matter, that U.S. stock exchanges and the SEC have discussed loosening regulations to make IPOs more enticing.
Mike Bellin, who heads consulting firm PwC’s U.S. IPO practice, said he anticipates a diversity of IPOs across sectors in the second half of the year. According to data from PwC, pharma and fintech were among the most active sectors for deals through the end of May.
While the recent trend in IPO activity is an encouraging sign for investors, potential roadblocks remain.
Tariffs and geopolitical uncertainty delayed IPO plans from companies including Klarna and StubHub in April. Neither has provided an update on when they plan to debut.
FirstMark’s Heitzmann said the path forward is “not at all clear,” adding that he wants to see a strong quarter of economic stability and growth before confidently saying that the market is wide open.
Additionally, other than CoreWeave and Circle, recent tech IPOs haven’t had big pops. Hinge Health, Chime and eToro have seen relatively modest gains from their offer price, while Omada Health is down.
But virtually any activity beats what VCs were experiencing the last few years. Overall, Hippeau said recent IPO trends are generally encouraging.
“There’s starting to be kind of light at the end of the tunnel,” Hippeau said.
Shares of advertising technology company AppLovin and stock trading app Robinhood Markets each jumped about 7% in extended trading on Friday after S&P Global said the two will join the S&P 500 index.
The changes will go into effect before the beginning of trading on Sept. 22, S&P Global announced in a statement. AppLovin will replace MarketAxess Holdings, while Robinhood will take the place of Caesars Entertainment.
In March, short-seller Fuzzy Panda Research advised the committee for the large-cap U.S. index to keep AppLovin from becoming a constituent. AppLovin shares dropped 15% in December, when the committee picked Workday to join the S&P 500. Robinhood, for its part, saw shares slip 2% in June when it was excluded from a quarterly rebalancing of the index.
The S&P 500 already has a heavy concentration of large technology companies. Datadog and DoorDash entered earlier this year.
It’s normal for stocks to go up on news of their inclusion in a major index such as the S&P 500. Fund managers need to buy shares to reflect the updates.
AppLovin and Robinhood both went public on Nasdaq in 2021.
Robinhood has been a favorite among retail investors who have bid up shares of meme stocks such as AMC Entertainment and GameStop.
AppLovin itself became a stock to watch, with shares gaining 278% in 2023 and over 700% in 2024. As of Friday’s close, the stock had gained only 51% so far in 2025. AppLovin’s software brings targeted ads to mobile apps and games.
Earlier this year, AppLovin offered to buy the U.S. TikTok business from China’s ByteDance. U.S. President Donald Trump has repeatedly extended the deadline for a sale, most recently in June.
At Robinhood’s annual general meeting in June, a shareholder asked Vlad Tenev, the company’s co-founder and CEO, if there were plans for getting into the S&P 500.
“It’s a difficult thing to plan for,” Tenev said. “I think it’s one of those things that hopefully happens.”
He said he believed the company was eligible.
Shares of MarketAxess, which specializes in fixed-income trading, have fallen 17% year to date, while shares of Caesars, which runs hotels and casinos, are down 21%.
AppLovin and Robinhood ytd stock chart.
U.S. Federal Trade Commission Commissioner Rebecca Slaughter raised questions on Friday about the status of an artificial intelligence chatbot complaint against Snap that the agency referred to the Department of Justice earlier this year.
In January, the FTC announced that it would refer a non-public complaint regarding allegations that Snap’s My AI chatbot posed potential “risks and harms” to young users and said it would refer the suit to the DOJ “in the public interest.”
“We don’t know what has happened to that complaint,” Slaughter said on CNBC’s ‘The Exchange.” “The public does not know what has happened to that complaint, and that’s the kind of thing that I think people deserve answers on.”
Snap’s My AI chatbot, which debuted in 2023, is powered by large language models from OpenAI and Google and has drawn scrutiny for problematic responses.
The DOJ did not immediately respond to a request for comment. Snap declined to comment.
Slaugther’s comments came a day after President Donald Trump held a White House dinner with several tech executives, including Google CEO Sundar Pichai, Meta CEO Mark Zuckerberg and Apple CEO Tim Cook.
“The president is hosting Big Tech CEOs in the White House even as we’re reading about truly horrifying reports of chatbots engaging with small children,” she said.
Trump has been attempting to remove Slaughter from her FTC position, but earlier this week, U.S. appeals court allowed her to maintain her role.
On Thursday, the president asked the Supreme Court to allow him to fire her from the post.
FTC Chair Andrew Ferguson, who was selected by Trump to lead the commission, publicly opposed the complaint against Snap in January, prior to succeeding Lina Khan at the helm.
At the time, he said he would “release a more detailed statement about this affront to the Constitution and the rule of law” if the DOJ were to eventually file a complaint.
WATCH: FTC Commissioner Rebecca Slaughter on President Trump’s latest attempt to fire her.
Technology
Google leads monster week for tech, pushing megacaps to combined $21 trillion in market cap
Alphabet and Google CEO Sundar Pichai meets with Polish Prime Minister Donald Tusk at Google for Startups in Warsaw, Poland, on February 13, 2025.
Klaudia Radecka | Nurphoto | Getty Images
From the courtroom to the boardroom, it was a big week for tech investors.
The resolution of Google’s antitrust case led to sharp rallies for Alphabet and Apple. Broadcom shareholders cheered a new $10 billion customer. And Tesla’s stock was buoyed by a freshly proposed pay package for CEO Elon Musk.
Add it up, and the U.S. tech industry’s eight trillion-dollar companies gained a combined $420 billion in market cap this week, lifting their total value to $21 trillion, despite a slide in Nvidia shares.
Those companies now account for roughly 36% of the S&P 500, a proportion so great by historical standards that Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC by email, “there are no comparisons.”
There was a certain irony to this week’s gains.
Alphabet’s 9% jump on Wednesday was directly tied to the U.S. government effort to diminish the search giant’s market control, which was part of a years-long campaign to break up Big Tech. Since 2020, Google, Apple, Amazon and Meta have all been hit with antitrust allegations by the Department of Justice or Federal Trade Commission.
A year ago, Google lost to the DOJ, a result viewed by many as the most-significant antitrust decision for the tech industry since the case against Microsoft more than two decades earlier. But in the remedies ruling this week, U.S. District Judge Amit Mehta said Google won’t be forced to sell its Chrome browser despite its loss in court and instead handed down a more limited punishment, including a requirement to share search data with competitors.
The decision lifted Apple along with Alphabet, because the companies can stick with an arrangement that involves Google paying Apple billions of dollars per year to be the default search engine on iPhones. Alphabet rose more than 10% for the week and Apple added 3.2%, helping boost the Nasdaq 1.1%.
Analysts at Wedbush Securities wrote in a note after the decision that the ruling “removed a huge overhang” on Google’s stock and a “black cloud worry” that hung over Apple. Further, they said it clears the path for the companies to pursue a bigger artificial intelligence deal involving Gemini, Google’s AI models.
“This now lays the groundwork for Apple to continue its deal and ultimately likely double down on more AI related partnerships with Google Gemini down the road,” the analysts wrote.
Mehta explained that a major factor in his decision was the emergence of generative AI, which has become a much more competitive market than traditional search and has dramatically changed the market dynamics.
New players like OpenAI, Anthropic and Perplexity have altered Google’s dominance, Mehta said, noting that generative AI technologies “may yet prove to be game changers.”
On Friday, Alphabet investors shrugged off a separate antitrust matter out of Europe. The company was hit with a 2.95-billion-euro ($3.45 billion) fine from European Union regulators for anti-competitive practices in its advertising technology business.
Broadcom pops
While OpenAI was an indirect catalyst for Google and Apple this week, it was more directly tied to the huge rally in Broadcom’s stock.
Following Broadcom’s better-than-expected earnings report on Thursday, CEO Hock Tan told analysts that his chipmaker had secured a $10 billion contract with a new customer, which would be the company’s fourth large AI client.
Several analysts said the new customer is OpenAI, and the Financial Times reported on a partnership between the two companies.
Broadcom is the newest entrant into the trillion-dollar club, thanks to the company’s custom chips for AI, already used by Google, Meta and TikTok parent ByteDance. With Its 13% jump this week, the stock is now up 120% in the past year, lifting Broadcom’s market cap to around $1.6 trillion.
“The company is firing on all cylinders with clear line of sight for growth supported by significant backlog,” analysts at Barclays wrote in a note, maintaining their buy recommendation and lifting their price target on the stock.
For the other giant AI chipmaker, the past week wasn’t so good.
Nvidia shares fell more than 4% in the holiday-shortened week, the worst performance among the megacaps. There was no apparent negative news for Nvidia, but the stock has now dropped for four consecutive weeks.
Still, Nvidia remains the largest company by market cap, valued at over $4 trillion, with its stock up 56% in the past 12 months.
Microsoft also fell this week and is on an extended slide, dropping for five straight weeks. Shares are still up 21% over the last 12 months.
On the flipside, Tesla has been the laggard in the group. Shares of the electric vehicle maker are down 13% this year due to a multi-quarter sales slump that reflects rising competition from lower-cost Chinese manufacturers and an aging lineup of EVs.
But Tesla shares climbed 5% this week, sparked mostly by gains on Friday after the company said it wants investors to approve a pay plan for Musk that could be worth up to almost $1 trillion.
The payouts, split into 12 tranches, would require Tesla to see significant value appreciation, starting with the first award that won’t kick in until the company almost doubles its market cap to $2 trillion.
Tesla Chairwoman Robyn Denholm told CNBC’s Andrew Ross Sorkin the plan was designed to keep Musk, the world’s richest person, “motivated and focused on delivering for the company.”
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