IPO Trends in Technology and Life Sciences in 2025

Published: Jan 8, 2025
By: Eli Silverman
Share

The U.S. life sciences and technology markets in 2024 were defined by innovation, recovery, and strategic capital deployment. The life science sector experienced growth in deal volume, fueled by advancements in cell and gene therapies. In contrast, the technology sector saw a resurgence in IPO activity, particularly for companies in artificial intelligence (AI) and cybersecurity.

Public companies in both industries have performed well, attracting investor confidence despite broader market volatility and cautiousness surrounding the US presidential election cycle. These trends set the stage for further growth and financing heading into 2025.

Technology IPO Trends

The technology sector dominated U.S. markets in 2024, leveraging advancements in AI, cybersecurity, and cloud computing. Public technology companies have enjoyed strong earnings, supported by widespread digital transformation initiatives across industries.

IPO Activity and Investor Focus in Technology

The average deal size declined despite the increase in technology IPOs, indicating a more cautious investment approach. Deal sizes in the in the technology industry decreased from 2023 to 2024, as the total funded IPOs were $6.7 billion in 2023 and $5.3 billion in 2024, but the total number of IPOs increased from 22 IPOs in 2023 to 27 in 2024.

Investors focused on companies with strong business models and scalability, emphasizing the importance of demonstrating market traction and financial sustainability. Companies specializing in generative AI and green technology have led the charge, attracting significant venture capital (VC) funding.

Life Sciences IPO Trends

The life sciences industry also experienced growth in IPO activity in 2024, driven by new drug development and advances in cell and gene therapy. AI and CRISPR technologies facilitated significant breakthroughs, attracting substantial investment.

IPO Activity and Investor Focus in Life Sciences

The sector saw an increase in both the number and average deal sizes of IPOs, although still below the record volumes of 2020-2021. In 2023, there were 25 IPOs in the life science sector totaling $2.5 billion, but in 2024 this increased to 42 IPOs with a total of $7.7 billion funded.

Investors prioritized companies with strong growth potential and innovative therapies, particularly those in later stages of development, highlighting the importance of a robust pipeline and successful clinical trials.

2025 IPO Outlook

Looking ahead, 2025 is expected to bring significant opportunities for the life science and technology markets. The IPO market is expected to rebound to typical levels, with the technology and life sciences sectors poised for growth. Companies in these industries should focus on showcasing their progress, growth strategies, and readiness to function as public entities. The built-up demand for capital and favorable market conditions post-election sets the stage for a return to normal IPO volumes.

Life Sciences IPO Outlook

In the life science sector, advancements in rare disease treatments, telemedicine, and digital health are anticipated to increase VC funding and IPO activity. Companies that successfully navigate regulatory landscapes will likely attract heightened investor interest, especially those focusing on innovative and scalable healthcare solutions.

Technology IPO Outlook

Continued investment in AI and sustainable technologies is expected to fuel both VC deals and IPOs. The industry may see an uptick in public offerings as companies postponed during market volatility seek to capitalize on favorable conditions. AI tools will be a driving force in both technology and life sciences, as quickly and efficiently reaching the ‘go/no-go’ decision point is a key focus and attracts significant investment from venture capitalists. Integrating AI into critical industries like finance, healthcare, and energy will likely maintain robust investor demand.