The startup world begins 2025 on a decidedly more upbeat note than it did the previous year. The renewed optimism is in part due to the modest uptick in venture funding last year, when global startup investment finally topped pre-pandemic levels again.
But investors and entrepreneurs we spoke with aren’t just bullish about investment this year — they also think the M&A and IPO markets will regain steam. Let’s take a closer look.
The return of the IPO market
After a lethargic 2024, the IPO market is expected to finally wake up in 2025.
“I think there’s a lot of confidence in the market. Stock markets are trading at all-time highs,” Ran Ben-Tzur of legal advisory firm Fenwick & West told Crunchbase News’ Gené Teare in late 2024. And “there’s been a rotation back to focusing on growth, which obviously is great for tech.”
Other industry insiders agree that more companies in the backlog of large, late-stage venture-backed startups may finally head for the exits.
“Building on the success of the ServiceTitan IPO and a handful of others in 2024, expect to see the IPO window open wider in 2025,” Nina Achadjian — a partner at Index Ventures who led Index’s investment in ServiceTitan and is on the board of the software company — told us via email.
“There’s an incredible amount of unrealized value that can be unlocked by going public, and I expect that the small handful of venture-backed businesses that leaned into the IPO markets in 2024 will serve as leaders for private companies that might have otherwise waited for ‘perfect’ market conditions,” Achadjian said, adding that she expects to see IPOs from sectors ranging from fintech to cybersecurity to AI.
(The Crunchbase News team agrees, and with that, offered up our thoughts on 13 possible IPO candidates this year.)
M&A could bounce back
The IPO and M&A markets are closely linked, so it shouldn’t be too surprising that most insiders we spoke with also expect dealmaking to perk up this year. Their optimism is buoyed by a belief that the new White House administration will provide a more M&A-friendly regulatory environment.
The slow M&A and IPO markets of recent years has also hampered startup investment overall, since VCs haven’t been able to deliver returns to their LPs, and in turn have struggled to raise new funds on the scale of years past.
“People that manage money on behalf of others have faced multiple years of lower liquidity and that has ripple effects throughout all the markets, because that liquidity is supposed to be tomorrow’s commitments to new funds,” Ryan Hinkle, managing director at New York-based startup investor Insight Partners, told us in April.
“A commitment today is a return in three to five years, becomes a new commitment in three to five years. And so the cycle spins,” Hinkle said then. “That wheel has stopped spinning, or at least slowed dramatically.”
Venture investors we spoke with toward the end of the year said they hope that leadership changes at the Federal Trade Commission and U.S. Department of Justice will loosen the regulatory environment enough to encourage more startup acquisitions, after deals such as Amazon’s proposed $1.4 billion acquisition of iRobot were quashed by regulators in the Biden administration.
Venture investment to continue recovery
More liquidity in the market would also help firms raise new funds to invest, driving more investment into startups.
“History just shows very clearly that when there’s positive liquidity, more money goes into venture funds,” Beezer Clarkson, a partner at Sapphire Partners, said in an interview last year.
Other VCs we spoke with also expect 2025 venture spending to be quite strong, led by a continued surge in AI investment. That follows a year in which artificial intelligence startups captured nearly a third of all venture capital worldwide, with the $42 billion raised by AI startups in Q4 shattering quarterly records.
More crypto, less immigration?
Speaking of less regulation, the crypto and blockchain sector is expected to be one of the main beneficiaries of a more laissez faire approach by the new federal administration.
Immediately after Trump’s election victory, Bitcoin prices soared to more than $100,000. They’ve dipped slightly since but are still double where they were a year ago — reflecting a renewed bullishness that Trump and his allies will be staunch supporters of crypto.
That is expected to bring a renewed focus to Web3 overall, Yash Patel, general partner at investment firm Titanium Ventures, told Senior Reporter Chris Metinko late last year.
“You’ll see bigger companies get more engaged with Web3,” he said.
Not all of the new administration’s proposed policies would be beneficial to the startup world, however. Donald Trump’s proposed import tariffs could drive inflation higher again — and, in turn, spike interest rates further.
Trump’s Republican allies have also been at odds over the future of legal, high-skilled immigration and the H-1B visa program — issues central to Silicon Valley, which relies on bringing in thousands of foreign engineers to fulfill its need for technical talent.
The president-elect’s views about regulation have also frequently been self-contradictory. While Trump has talked about easing regulations, he and Vice President-elect JD Vance have been frequent and vocal critics of large technology companies such as Google and Meta. Trump also nominated Big Tech critic Gail Slater to lead the Justice Department’s antitrust efforts — signaling continued aggressive antitrust enforcement by the new administration.
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