After what’s felt like years of radio silence, there are genuine signs that the IPO market might be stirring back to life. For those in tech, venture capital and capital markets, it’s a long-awaited shift – and one that could reshape the outlook for 2025.
 
A big catalyst? Klarna.
                                                                                                                                                                             
The Swedish buy-now-pay-later firm has filed to go public on the New York Stock Exchange, reportedly aiming for a valuation of around $15 billion. That’s down from its 2021 high of $45.6 billion – but up from its low of $6.7 billion during the tech slump of 2022. More importantly, it’s a sign of confidence that investors might finally be ready to engage again with high-growth, consumer-facing tech companies.
 
And Klarna isn’t just any company. It’s a market leader in BNPL, a sector that was previously red hot but has faced sharp scrutiny over profitability and regulation. If Klarna’s IPO is successful, it could pave the way for others to follow – particularly in the UK, where we’ve several promising fintech and BNPL players with IPO ambitions.
 
Klarna’s listing: a spark for the sector?
 
Tim Levene, CEO of Augmentum Fintech, summed it up neatly: “We hope Klarna is the first of many to list – a positive data point that unlocks momentum.”
 
He’s not wrong. Klarna’s move could pave the way for the likes of Zilch, the UK-based BNPL startup, which has said it’s eyeing a listing in 2026. CEO Philip Belamant described Klarna’s filing as “a significant moment for the fintech sector,” and believes it could reignite investor interest in European growth-stage businesses.
 
Adding in UK fintechs like Monzo, Starling, Zopa, and Revolut – all of whom have IPOs on their radar – makes it clear that a successful Klarna debut could serve as a green light for the rest of the market.
 
A pulse returning to New York
 
It’s not just Klarna. On a recent episode of CVC Unplugged, executives from the New York Stock Exchange spoke about a noticeable shift in sentiment. While Q1 was cautious, they’re expecting a “very active Q2,” with dozens of companies ready to go once volatility settles. They’re not calling it a full reopening yet, but the cadence is picking up, and the pipeline is robust.
 
It’s worth remembering that in 2021, IPOs were booming. But in the years that followed, the market practically froze. Global fintech IPOs dropped from over $290 billion in 2021 to just $32 billion across the next three years. If even a handful of large, well-known tech firms can successfully float this year, such as Klarna, Stripe, and Databricks, it would signal to investors that the appetite is returning.
 
Where does this leave London?
 
Closer to home, the UK market is still playing catch-up.
 
According to Bloomberg, the London Stock Exchange slipped to 20th in global IPO rankings in 2024, behind countries like Oman and Malaysia. Just 18 companies listed all year – the lowest number on record. And it wasn’t just a matter of global slowdown; many UK-based companies have been opting for New York over London.
 
In her recent appearance on The Twenty Minute VC podcast, LSE CEO Dame Julia Hoggett addressed this head-on. She acknowledged that structural challenges – such as the UK’s stamp duty on shares – and changes in pension fund investment habits have contributed to the London Stock Exchange's (LSE) declining competitiveness. But she also pushed back on the assumption that London listings automatically come with lower valuations. According to her, it’s more a matter of perception than reality.
 
Still, the numbers tell a story. UK founders and investors are understandably tempted by the liquidity and valuation levels on offer in the US. That said, there are tentative signs of life in the City. Firms like Ebury are reportedly considering a London IPO as early as this summer. If Klarna’s NYSE debut goes well, and confidence picks up, we may see London benefit from a ripple effect.
 
But for that to happen in a meaningful way, reforms and incentives will need to follow. As Dame Julia put it, “we need to tilt the system back toward growth.”
 
Why this matters for venture capital
 
For VCs, a reopening IPO window is more than good news – it’s a critical release valve. For the past two years, exit opportunities have been scarce. Without IPOs, many funds have had to hold onto companies for longer, delay new fundraising, or explore less optimal secondary or trade sale routes.
 
A functioning IPO market doesn’t just create liquidity. It also helps set valuations, revitalise investor confidence, and free up capital to reinvest in the next generation of startups. It turns the flywheel.
 
So is the IPO market wide open? Not quite. But Klarna’s move – and the increasing chatter from the NYSE – suggest we might finally be through the worst. The coming weeks will be critical in gauging whether others follow. That said, investors remain mindful of the geopolitical environment and market volatility, which could still shift sentiment quickly.
 
For the UK, the challenge now is not just to watch New York – but to learn, adapt and compete. A successful Klarna float could be the nudge London needs to regain ground in the global IPO race.
 
Have a great week!