Private Market Update June 2025

After a wild bout in April, both the private and public markets returned to their fighting rhythm in May. Specifically, the private market continued its upward swing throughout the month, while the public market extended its strong performance that began in late April. And, while tariff whiplash continues to dominate media headlines¹, broader market activity appeared to suggest that investors may have moved past April's tariff shock wave.

A notable side effect of the public market recovery has been renewed IPO activity as well as renewed private market optimism. During May, eToro², MNTN³ and Hinge Health⁴ went public. Despite entering an untested market, share prices for each have remained above their IPO prices as of the end of May with eToro up 13.8%, MNTN up 57.7% and Hinge Health up 21.4%.⁵ Circle and online diabetes management company Omada Health⁶ followed these success stories with IPOs in early June.⁷ Then, came Chime’s IPO on June 12th.⁸

While the market appears to be on a positive track, the specter of a U.S. recession sometime in 2025 still lingers. With elevated consumer prices, a slowing job market (due, in part, to AI⁹) and the possibility for extended trade wars—particularly, as China¹⁰ tensions mount—the potential for a recession in the U.S. is still a legitimate concern for investors.¹¹

Yet, one sector that has shown it has a puncher’s chance through the turmoil is fintech. Even after a rough couple of years, some shining stars of the fintech sector are contributing to a strengthening IPO pipeline. Outside of fintech, the only other prominent company viewed as likely to IPO in the near-term is design software company Figma.¹²

Fintech: the underdog contender

Like a boxer on the ropes, fintech companies have endured a valuation pummeling that has likely tested the resolve of many founders. From 2020 to 2021, companies raised money at valuations that would be unthinkable in today’s market and the fintech sector was no exception, only to have those valuations severely reversed starting in 2022 through 2023 before partially recovering starting in late 2023. Over the past year-plus, however, there are signs that investors’ fintech aversion may be abating.

From sucker punched to taking the gloves off

Since the heady, ZIRP (zero interest rate policy)-fueled days of 2020 to 2021, the Forge private fintech basket¹³ shows the sector hit bottom in late 2023 after suffering a string of secondary market valuation cuts beginning in early 2022. Showing that they didn’t have glass jaws, fintech company valuations began to recover throughout 2024. Thus far, 2025 is potentially shaping up to be a banner year for the fintech sector.

As the chart below shows, however, valuations in the fintech sector are weighing in well below the sector’s 2021 peaks. Fintech sector valuations remain approximately 39% below their last round marks; however, median valuations in the private market as a whole have recovered to about 18% below their last rounds. While this may not look healthy on the surface, it does highlight the renewed interest that investors have shown, as fintech companies adapted to the new market environment despite lower valuations.

Private fintech company valuations continued to recover during the first half of 2025, despite public market volatility. The Forge private fintech basket showed solid price appreciation during the preceding three months and held steady as the public market went down for the count in April. But then, the sector came out swinging in May. Stripe had a tender offer at a $91.5 billion valuation¹⁴, not to mention public S-1 filings from Chime¹⁵ and Klarna¹⁶ — just a few of the milestones that helped boost the Forge private fintech basket. Investors appear to be encouraged by the burgeoning IPO pipeline, which has helped push valuations higher and create fintech buzz.

Chime’s performance, for example, illustrated the fintech sector’s journey thus far. The company is a well-known brand and last raised capital at a $25 billion valuation in August 2021.¹⁷ The subsequent Great Reset from 2022 to 2023 saw Chime’s Forge Price™ valuation hit a low of $5.8 billion in November 2023. From there, Chime’s Forge Price slowly trended higher to a valuation of $11.4 billion, as of the end of May 2025. Still a decacorn, but down over 54% [as of the end of May] from its Forge Price valuation peak, Chime is showing a resilient path forward despite humbling results over the past few years.

Now, after rolling with the punches, fintech companies have formed a solid IPO pipeline.¹⁸Klarna may restart its IPO process later this year.¹⁹ Gemini has confidentially filed its S-1²⁰ and may feel encouraged to move further down the IPO path if the current fintech IPO prospects perform well in the public market.

Meanwhile, Kraken has not announced or taken definitive actions to become a public company, but appears well-positioned to do so given its financial profile of scale revenue and profitability.²¹

Finally, and more recently, Circle IPO-ed²² after increasing the price of its shares from a $24-$26 range up to $31.²³ Then, on the first day of trading, the stock opened at $69 on the New York Stock Exchange (NYSE) and, at one point, shares traded as high as $103.75 , demonstrating that for at least some names, there is pent-up demand for IPO investment opportunities in fintech. Chime launched its IPO with a similar splash on June 12, 2025. Shares jumped as much as 59% above the $27 offering price—opening at $43 and closing near $37—marking a noteworthy public debut for the US’s largest neobank.²⁴

Private vs. public company battle royale

The private vs. public company comparison series that Forge initiated in May 2025, which highlights Forge’s Yahoo Finance partnership, is one tool to compare performance of private and public companies including those in the fintech sector.

When looking at a price comparison chart of buy now, pay later (BNPL) competitors Klarna and Affirm (NASDAQ: AFRM), one observes that Klarna has had an ongoing price appreciation beginning in early 2024.

Klarna posted solid financial results during this timeframe while also announcing major business developments. Growth in Klarna’s Q1 2025 U.S. revenue was up an impressive 33% year-over-year²⁵, while the company secured partnerships with online titans Walmart (previously with Affirm)²⁶ and DoorDash²⁷ and introduced a Klarna branded debit card in the U.S..²⁸ All of this positive news has caused Klarna’s Forge Price to more than double since March 2024. In contrast, Affirm’s shares are nearly flat from January 2024 through May 2025, showing Klarna has gained traction as it moves forward with a potential IPO.

2025 IPOs not pulling punches thus far

Investors may be looking to bob and weave between returns and liquidity/distributions in the current private market environment. Rather than hold out for an IPO valuation above the last round that may never materialize, private investors in this early batch of 2025 IPOs have been accepting lower initial valuations. They’ve observed IPO pricing increases for companies that recently went public and subsequent appreciation of those companies that have entered the public market.

While in many cases, the post-IPO valuation after the first day of trading still has not exceeded a company’s last round valuation, this process allows investors to move forward in a way that, so far, seems hearten stakeholders, including early investors, employees and public investors. Fund managers, after the IPO lockup expiration, may have the opportunity to distribute the proceeds back to limited partners to potentially exit the investment on a positive note and start the process in earnest again—hopefully, with fresh capital.

Adjusting to their lower valuation reality may be a cogent strategy for private fintech companies, as the IPO window opens and investor interest appears to be growing. In the end, IPOs will be the ultimate test for gauging the recovery of the fintech sector. Signs from recent public offerings have been positive as Hinge Health, MNTN, Circle and eToro, have stayed above opening day prices despite increasing their IPO valuations prior to debuting. This may embolden more companies and investors to use a similar strategy, helping to finally put the frothy days of 2021 behind them and develop a capital markets ecosystem that is harder to knock out in the process.

AI is beating legacy companies to the punch

A May 2025 assessment would be remiss if AI companies did not get a mention, particularly given their continued strong performance. While the public market staged an amazing recovery during May after a challenging April, the performance of the Forge private AI basket²⁹

For May 2025, the Forge private AI basket returned 5.9% compared to 6.4% for SPY and 9.4% for QQQ. Looking at the previous three months shows the gap in investor demand between the tech-heavy, but limited AI exposure QQQ, mostly legacy company SPY and the Forge private AI basket. Major contributors to the Forge private AI basket performance during May 2025 include Perplexity, raising $500 million at a $14 billion valuation³⁰ and CoreWeave, whose spectacular run as a newly minted public company bested 155% appreciation in May alone.

The broader private market continues to go blow for blow with the public market. While the public market had a strong May, with SPY returning 6.4% and QQQ 9.4%, the Forge Accuidity Private Market Index (FAPMI) held its own, thanks to its inclusion of CoreWeave and returned 6.6% during May. The equal-weighted Forge Private Market Index (FPMI), which doesn’t include CoreWeave among its constituents, was quieter in May, returning 0.5%.

Forge Data through 5/30/25

Buy-side indications of interest (IOIs) bounce back after several months of declines

May 2025 ushered in a reversal for buy-side IOIs after starting 2025 in a downward trajectory. Buy-side IOIs comprised 62% of total IOIs pointing to renewed demand for private market stocks. Taking a step back, the long-term upward trend for buy-side IOIs remains intact.

The median spread remained relatively tight, continuing the trend from April

The median spread during May 2025 mostly held steady, coming in at 6.3% versus 6.4% in April 2025. This is, however, a level not seen since June 2023 when the median spread reached 6.1%. The average median spread from January 2020 until the end of May 2025 was 10.8%. A lower median spread can be associated with an increased rate of closed trades as it indicates that buyers and sellers have similar expectations on price.

Trade premiums were mixed during May 2025

Last month, trade premium upper percentiles (90th and 75th) moved up, while the median and 10th percentiles both slid down. The median, in particular, was at an 18% discount, down from a 13% discount in April 2025. Overall trade premiums, however, remained well above the lows seen during the Great Reset from 2022 to 2023.

As we near the mid-point of 2025 and the annual summer slowdown approaches, companies recognize that they have a limited window to go public unless they want to restart the process in the fall. Thus far, each IPO in 2025 has been closely scrutinized to determine if it will be “the one” that signals the IPO window is fully open.

And while the private market may still be navigating inflationary pressure and geopolitical friction, fintech’s bounce back—evidenced by rising valuations, increased IPO activity and strategic recalibration—show that the sector is no glass-jawed challenger. Rather, it’s a sector regaining strength, focus and investor confidence.

Of course, missing from the current IPO picture are enterprise software and AI companies, but that could change quickly if more companies are successful at going public during the remaining days of the first half of 2025. It's time to grab a ringside seat because the next few weeks should be telling.