After a prolonged IPO drought, many venture-backed startups in the US were eagerly eyeing 2025 as a year to finally go public, but the most recent US tariffs have now shaken those hopes. In early April 2025, the US administration announced a sweeping set of tariffs, prompting several high-profile startups to put the brakes on their IPO plans.
Market Reaction and Investor Sentiment
The immediate market reaction to the tariff announcement was one of shock and volatility. US stock indices tumbled on the news, reflecting fears of a trade war’s impact on the economy. Venture capitalists (VCs) also report a climate of hesitation in the weeks following the tariffs. “No one seems to grasp what the real underlying strategy is and how long this approach will persist, so the default approach is to not invest or make any large moves until some steady state becomes more clear,” said Jeremy Korst, a tech investor and partner at consulting firm GBK Collective. In other words, many investors are holding off on major funding decisions.
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Tariffs Stall IPO Momentum, Just as the Market Shows Signs of Life
Perhaps the biggest question for venture-backed companies right now is when the IPO window will reopen. Over the last two years, IPOs for tech startups have virtually ground to a halt. 2023 and 2024 were sluggish for IPOs, with many unicorns postponing exits due to market volatility, first from the pandemic aftermath and then rising interest rates. Coming into 2025, signs of renewed momentum began to emerge as a few large offerings had either launched or were on deck. For instance, cloud computing startup CoreWeave debuted in late Q1 with a market capitalization of $23 billion, an encouraging signal of renewed activity in the IPO market.
However, the eruption of tariff tensions has swiftly dampened those optimistic forecasts. Analysts now caution against a delayed IPO rebound. According to PitchBook, the recent tariff announcement has substantially impacted VC activity and the pipeline of planned IPOs. In fact, multiple industry observers believe the VC liquidity crunch will persist for the foreseeable future. “The industry now faces additional risk dimensions in assessing tariff exposure across portfolios, while added uncertainty extends the persistent hesitation toward dealmaking and capital deployment,” noted Paul Condra, PitchBook’s private markets research head.
IPO Plans on Hold
Indeed, in the weeks following the tariff news, several prominent venture-backed companies hit the pause button on their IPO plans. According to the WSJ, at least five tech startups have postponed their IPOs post-tariff announcements. For example, Klarna was about to start its investor roadshow in early April 2025. It abruptly postponed the roadshow and IPO launch, given the heightened market volatility. Similarly, StubHub, the San Francisco-based ticketing marketplace, halted its roadshow, which was slated to begin the same week as the tariffs hit. Rather than risk a mispriced offering or a pulled IPO, they chose to wait for more favorable conditions.
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Beyond those specific examples, IPO data for the first part of 2025 reflects the dry spell. Only a handful of VC-backed IPOs have occurred so far this year in the US, and the backlog of unicorns remains large. Renaissance Capital has revised its 2025 IPO forecast downward, citing trade policy headwinds as a factor. Even the marquee names like Stripe are choosing alternative paths over an immediate IPO. For example, Stripe opted for an internal share sale at a $91.5B valuation in February 2025.
Valuations and Funding Implications
One consequence of the delayed IPO window is pressure on startup valuations and liquidity for investors. In the absence of public exits, VCs have few options to return capital, which will likely result in a significant bottleneck in venture funding activity. In 2024, many startups that peaked at sky-high valuations in 2021 had to accept down rounds or stay private longer than expected. Now, 2025’s tariff turbulence threatens to prolong that correction, especially in sectors most exposed to tariffs.
Conclusion
Many experts are growing less optimistic given the current trajectory of trade policy, and venture investors are already bracing for a prolonged exit environment. In this context, VCs are increasingly advising their portfolio companies to prepare for IPO delays of 18–24 months. There is broad agreement that greater clarity on trade policy will be essential to reopening the IPO window. If inflation remains under control and the Federal Reserve begins cutting rates later in 2025, combined with an easing of trade tensions, we expect to see a meaningful rebound in IPO activity by year-end.
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