The Venture Global IPO is the first big one of 2025, but it is receiving a cautious welcome. The liquified natural gas firm floated initial terms for its public offering with a lofty valuation: 50 million shares between $40 $46. At the midpoint, that would have raised $2.15 billion with a market capitalization of $110 billion. Then reality hit. That was quickly changed to 70 million shares at $23-$27. It priced at the midpoint of $25. They are now raising $1.75 billion, with a market cap of $60.5 billion ($67 billion fully diluted, which includes options). Bottom line: Instead of raising $2.15 billion, it is now raising $1.75 billion. Instead of a market capitalization of $110 billion, it is now at roughly $60 billion. That represented a nearly 20% cut in proceeds and a roughly 40% reduction in market capitalization. That is a big haircut. What happened? Was this a company-specific issue, or a broader sign investors were going to give IPO hopefuls a long hard look before buying in? “I suspect this was more company specific,” Renaissance Capital strategist Matt Kennedy told me. Kennedy noted that, the week before energy company Flowco had gone public. It traded up on its first day, and is up 23% since its debut. That was a positive signal to energy companies, he said. More importantly, Venture Global “was hoping to ride the wave of excitement around the Trump administration and energy,” Kennedy said. That didn’t work out quite as planned. “Investors are still expecting to get an IPO discount, and they’re still willing to push back when they don’t get one,” Kennedy added. Recent IPOs have done well Recent IPOs have indeed done well. The problem is there haven’t been many of them since the election. Recent IPOs (return from IPO price): Flowco : up 23% ServiceTitan : up 38% Pony AI : up 37% Regardless, the IPO community is bulled up, believing that a still-strong economy and an AI investing wave will finally break the spell of the disastrous last three years — which have seen total IPO raises about half of the typical $50 billion-a-year raise. Total raised from IPOs since 2017: 2024: $29.6 billion 2023: $19.4 billion 2022: $7.7 billion 2021: $142 billion (record) 2020: $78 billion 2019: $46 billion 2018:$47 billion 2017: $35.5 billion Source: Renaissance Capital “The IPO market is picking up, there is a lot of activity,” Santosh Rao from Manhattan Venture Partners told me. There are some early signs of life. Pork producer Smithfield Foods will likely begin trading on the Nasdaq on Tuesday. But Wall Street does not get excited about pork. It gets excited about tech. And it gets excited about a very specific kind of tech, Howe Ng from Forge Global told me. For him, the IPO market is divided between AI and non-AI candidates. “It’s all about chasing momentum and valuation,” he said. “If we can get AI names to go public, it will encourage other, non-AI names. The AI names will get high valuations.” The problem is that the AI names can raise plenty of money in the private markets. Forge Global tracks a private basked of private company AI names, including OpenAI, Databricks, xAI, CoreWeave, Anthropic, Scale.AI and Perplexity. He said there is little pressure for those companies to go public now. Ng noted that Databricks, which runs a cloud-based platform for storing and analyzing data, recently closed a $10 billion fundraising round, which values the company at $62 billion. It also raised $5.25 billion in debt. That ability to raise money is also combining with an increasing ability to allow early investors and employees to cash out. “There is a very liquid secondary market” that has developed in private markets, Rao told me. “Companies have found ways to help their employees cash out,” which for some companies has greatly removed pressure to go public. What about non-AI companies? That leaves the rest of the market: non-AI companies. Ng told me that while non-AI are hopeful for better valuations. “Some of them may run out of money because all the money has been directed to AI, and those companies will be forced to go public.” Names that are frequently brought up as IPO candidates include Chime, a fintech name, which filed confidentially. SalePoint, a cybersecurity company, filed to go public last week. They had been taken private in 2022 after being publicly traded for four years. Trading platform eToro recently filed confidentially, reportedly targeting the second quarter for a public offering. CoreWeave is also on the “maybe” list. StubHub and SeatGeek are still potential IPOS for the first half. Still, the IPO market is facing a paradox, Ng tells me. “The best shot is to get AI companies to go public,” he said, noting they will get the highest valuations. “You want a lot of companies to go public with good valuations, and then the after-market is strong.” Kennedy from Renaissance Capital, however, noted there are dozens of non-AI companies eager to go public — even if it means facing a potential lower round of valuation. That’s one reason the lower valuation of Venture Global does not disturb him. “If we saw investors were willing to pay any price for these IPOs, that would be a good sign for activity. But the fact that they are pushing back on pricing for Venture Global doesn’t change our opinion.”