The Trump administration’s tariff announcements on Wednesday are highly consequential and have been analyzed from every possible angle. But as the dust begins to settle, attention is turning to the potential second-order effects that this week’s events could have on the tech industry.
Just one week ago, when we wrote about CoreWeave’s IPO last Friday, it seemed like the tech IPO market was poised for a revival. In the month of March alone, three multi-billion-dollar tech companies filed to go public: Hinge Health, Klarna, and StubHub. But within a few days after new tariffs were announced, two of the three (Klarna and StubHub) had reportedly already “delayed” their plans to go public.
After a week that saw the Nasdaq drop by over 10%, its steepest drop since COVID-19 lockdowns began in March 2020, it’s not a mystery why these companies have chosen to delay their IPOs. But it’s an ominous sign for the tech industry, which was just starting to recover after a period of depressed activity.
After a frenzy of IPOs in 2021, which saw 126 US tech companies go public, numbers declined into the single digits from 2022 to 2024. Compared to the 2010s, which saw an average of about 35 US tech IPOs per year, this was a substantial drop off — and one with profound liquidity consequences for private tech companies and their investors.
Although mechanisms for private liquidity like secondary markets saw a corresponding growth in transaction volume over the same period that IPOs were depressed, ultimately lack of access to public markets cuts off an important source of capital for companies themselves, and creates friction for early investors and employees of companies who often look forward to liquidity events such as IPOs or acquisitions to cash in on years of patience.
This, in turn, changes the risk/reward calculus of founding, investing, or working at early-stage tech companies. One of the many important downstream effects of the US’s tariff policy, if it continues to create either lasting uncertainty or leads to a protracted decline in public markets, could be an ongoing US tech IPO winter. It’s an open question if that how long that outcome would cause Klarna and StubHub to postpone their IPOs, or whether they would cancel them entirely and decide to stay private.
Such an outcome would also lead to a slowdown in startup funding at the exact time when the startup ecosystem is undergoing what may well turn out to be its biggest transformative moment since the invention of the iPhone, and when the AI arms race between China and the US seems destined to reach a critical point by the end of the decade.
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