The quick summary: 2025 was slated to be a massive year with the IPO window “blown open” by some accounts. In reality, it barely cracked open — only 6 pure-play software IPOs all year. But M&A came roaring back with $587B in volume, the largest in the past decade. The best private companies (SpaceX, OpenAI, Anthropic, Stripe, Databricks) continue choosing to stay private. Late-stage investors saw muted returns, with the median 2025 IPO trading 10% below its last private round. The setup for 2026 looks stronger, with SpaceX potentially filing the largest IPO ever.
Meritech did a deep dive here, and our learnings below.
#1. The IPO Market Remained Weak In The End in 2025. Just 6 Software IPOs.
There were only 6 pure-play software/infrastructure IPOs in 2025 (7 including CoreWeave). For context, 2021 saw 27 pure-play SaaS IPOs.
The larger reality is that public markets have been less appealing to the most promising companies. SpaceX, OpenAI, Anthropic, Stripe, Databricks, and others opted to raise private capital despite significant demand for their shares in public markets.
#2. But M&A Hit a Decade High. The Big Story.
M&A reached $587B in volume across public and private technology companies — the largest volume in the past decade.
A huge driver was the perceived change in the regulatory regime, particularly in the U.S.
Top private software deals: Wiz ($32B), Scale AI ($14.3B), and Armis ($7.75B).
#3. Figma Set the Benchmark for IPO Quality
Figma delivered almost 50% year-over-year revenue growth and almost 30% free cash flow margin on over $800M of LTM revenue and ~$1B of implied ARR.
Figma is the only company trading above 10x EV/ARR.
#4. Median IPO Metrics Were Solid, But Returns Were Meh
The 2025 software IPO cohort: Median LTM revenue of $616M with 35% LTM revenue growth and (5%) LTM free cash flow margins. Median valuation is 8.7x EV/ARR.
Returns from most recent private rounds were muted — the median is (10%). Figma and CoreWeave were exceptions, up 61% and 52% respectively.
#5. Public Software Remains Cheap — But Acquirers Are Selective. Few Acquisitions Here.
There are 92 public software companies trading below 10x NTM revenue — 85% of the total. 60 trade below 5x NTM revenue, with a median NTM revenue growth rate of 11%.
Despite reasonable valuations for acquirers, their revenue growth rates are less compelling. Most public M&A multiples paid were under 10x NTM revenue.
The total 2025 IPO market was concentrated: 21 technology IPOs with total market cap of nearly $150B. The top 5 — CoreWeave, Figma, Klarna, Sailpoint, and Chime — account for 56% of the total.
5 More Quick Learnings:
- Non-software tech IPOs (consumer, fintech, healthcare) showed median LTM revenue of $378M with 33% growth and 8% FCF margins — better margin profile than software cohort.
- Non-software IPO returns from last private round had a median 6% return — meaningfully better than software’s (10%) median loss.
- Median market cap at IPO is rising as companies stay private longer — outcomes are larger even if volume is lower.
- The Nvidia/Groq licensing deal announced on Christmas Eve 2025 highlighted continued AI infrastructure M&A appetite outside traditional software.
- Fear around non-AI stories is a contributor to PE and strategic buyers remaining less active despite historically cheap public software valuations.
