Markets saw a
selective reopening

The exit market strengthened in 2025, generating $297.6 billion in exit value across an estimated 1,635 transactions, marking the fourth-highest exit value and second-highest exit count year of the past decade. Exit value nearly doubled year-over-year. Even so, results fell short of the high expectations set by the backlog of unicorns built from 2022 to 2024 and the more than sixfold valuation growth they have experienced since 2019.

The IPO market showed more life, but the reopening was selective. Forty-eight venture-backed companies went public, including 17 unicorns, moving total IPO exit value closer to pre-pandemic norms. The recovery was not broad enough to declare the exit market “fully open,” but it was a significant increase in activity from the prior two years. Many of the largest and most closely watched private companies – SpaceX, OpenAI, Stripe, Databricks, ByteDance, and others – continued to delay listings, supported by abundant capital and improved private liquidity options.

This approach extended companies’ private lifecycles while helping them avoid the cost and scrutiny of public markets. Post-IPO performance was generally uneven, reinforcing the view that 2025 marked a cautious reopening of the public markets rather than a full return to historical norms.

M&A remained essential but skewed toward smaller, more targeted transactions. Sixty-three percent of acquisitions occurred at Seed, Series A, or Series B, as buyers pursued talent and product expansion. Many of these deals were pragmatic outcomes rather than power-law exits.

The buyer mix also continued to shift: well-capitalized VC-backed companies accounted for 38.4% of M&A count, filling a gap as public company acquirers remained cautious due to regulatory scrutiny and closing complexity. Looking ahead, a more predictable policy backdrop and easing rates could narrow bid-offer spreads and support larger, more strategic transactions – especially if public markets improve.

More than a niche asset class, venture capital sits at the center of value creation. Seven of the ten largest public companies in the world were venture-backed: NVIDIA, Alphabet, Apple, Amazon, Meta, Broadcom, and Tesla. Meanwhile, the number of publicly traded U.S. companies has fallen by about half from its peak in the late 1990s, with the highest-quality growth companies in many sectors remaining private.

There are now more than 1,300 venture-backed companies valued at $1 billion or more worldwide. Compared to fewer than 10 in 2005 and 142 in 2015, the number of these unicorns has rapidly expanded.

One of the most important developments of 2025 was the parity between secondaries and traditional exit channels. On a trailing twelve-month basis as of September 30, 2025, venture secondaries generated $94.9 billion in exit value, which is not far from the $104.7 billion generated by IPOs and the $107.1 billion created by acquisitions. Secondaries are increasingly a core liquidity mechanism rather than a niche tool with adverse signaling. Over time, this could begin to resemble private equity, with ownership transferring to the best long-term holders at different stages of a company’s life.