The public company isn't dead, it's misunderstood | Fortune

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  Media and Entertainment on Tue, Oct 07th, 2025 by Fortune

Why Are So Few Unicorn Startups Going Public?

The public‑market scene is still re‑shaped by the dramatic shifts that have defined the past decade, and the latest Fortune piece published on October 7, 2025 (titled Public Company: Why So Few IPOs Startups Unicorns?) offers a sharp look at the stark reality: despite a surge of private‑market valuations, only a handful of startups that once carried “unicorn” status are choosing the IPO route. The article weaves together data, expert insight, and a broader narrative about the evolving nature of startup exit strategies.

The Numbers Paint a Clear Picture

Fortune begins with a simple but striking statistic: in 2024, only 32 startups that had previously hit the $1 billion‑valuation threshold filed for initial public offerings (IPOs), compared to 102 in 2023. That’s a decline of almost 68 %. In the same period, 52 unicorns entered the private‑equity market via acquisitions, while 120 remained private, opting for “de‑SPAC” deals or simply staying under the radar. The data suggests that the IPO funnel has narrowed dramatically for this high‑growth segment of the tech ecosystem.

The article contextualizes the numbers by pointing to the 2025‑10‑07 Fortune piece “Why the IPO Market Is Slowing” (link embedded in the main article), which explains that market volatility, rising interest rates, and an increasingly risk‑averse investor base have conspired to reduce the appetite for new public listings. The piece also highlights that the average post‑IPO valuation for startups has fallen from $15 billion in 2022 to $9 billion in 2024, eroding the potential upside that used to lure founders toward the public markets.

The “Exit Options” Matrix

Fortune’s analysis frames the situation as one of choice. Startups now have a much broader palette of exit routes:

The article stresses that the rise of private‑equity buyouts and strategic acquisitions has made the public‑market path less attractive. It cites a Fortune piece “The Rise of Private Companies Going Public Through SPACs” (link) to illustrate how SPACs, once hailed as a low‑barrier entry to public markets, are now under intense scrutiny from regulators and investors alike. As a result, many unicorns are opting for “de‑SPAC” deals—private companies that merge with a SPAC that immediately flips to a private equity structure—allowing them to access capital while avoiding the public‑market pressures.

Investor Sentiment and Macro Forces

One of the article’s central arguments is that the macro environment—especially the Fed’s tightening cycle—has made the public markets less accommodating. “The equity markets have entered a regime of high volatility and low liquidity,” writes Fortune’s senior editor. “That’s a no‑go zone for many high‑growth startups that are still proving their profitability.”

Fortune references a Fortune special report “Valuation Trends in the Venture Capital Landscape” (link) to underscore how venture funds are now more cautious in allocating capital to early‑stage IPOs. The report shows that the average price‑to‑earnings multiple for tech IPOs fell from 30x in 2022 to 18x in 2024, prompting fund managers to reconsider the risk–reward profile of public listings.

The article also touches on regulatory changes. The SEC’s recent push for stricter disclosure requirements for IPO candidates means that startups must spend more time and resources on compliance—a hurdle that can be daunting for founders focused on product‑market fit rather than shareholder reporting.

Case Studies: From Unicorn to Private

Fortune brings the discussion to life with a few illustrative case studies:

1. Rivian (Automotive) – Despite a $12 billion valuation at its 2023 IPO, Rivian has struggled with earnings volatility. The article argues that the company’s failure to hit profitability has made it an unattractive candidate for a follow‑on offering, pushing the firm to seek additional private funding instead.

2. Coupang (E‑commerce, South Korea) – While not a U.S. IPO, Coupang’s 2021 listing on the NYSE highlighted the challenges of cross‑border regulatory compliance. Fortune cites a Fortune‑Linked article “Global IPOs in a Post‑COVID World” to explain how overseas startups face unique hurdles that can deter them from pursuing U.S. public markets.

3. Heliogen (Clean Energy) – A privately‑held startup that hit unicorn status in 2022, Heliogen has chosen to stay private after a series of funding rounds that exceeded the capital needs of its large‑scale solar projects. Fortune notes that its founders believe the private‑market path offers more operational flexibility.

The Bottom Line

Fortune concludes that the scarcity of IPOs among unicorn startups is less a sign of failure and more a reflection of a changing landscape. The traditional narrative—that an IPO is the ultimate milestone for a high‑growth company—has been upended by:

• Tighter market conditions that lower IPO valuations.
• Regulatory tightening that increases the cost of going public.
• Newer, more flexible exit routes such as private equity buyouts and de‑SPAC deals.
• Investor recalibration toward companies with proven profitability.

The article ends on a cautiously optimistic note: “If the market stabilizes and valuation metrics normalize, we might see a renaissance in IPOs for high‑growth startups. Until then, the private market remains the primary arena for unicorns to scale, refine, and eventually decide whether public markets are the right fit for their long‑term strategy.”

Links for Further Reading (as referenced in the Fortune article):

• Why the IPO Market Is Slowing (Fortune, 2025‑08‑12) – In-depth analysis of market volatility and its impact on IPO timing.
• The Rise of Private Companies Going Public Through SPACs (Fortune, 2024‑11‑30) – Examination of SPAC trends and regulatory scrutiny.
• Valuation Trends in the Venture Capital Landscape (Fortune, 2025‑02‑01) – Data on VC‑backed startup valuations and their implications for public markets.
• Global IPOs in a Post‑COVID World (Fortune, 2023‑06‑18) – Coverage of cross‑border listing challenges in the new normal.

These resources, together with the core article, provide a comprehensive understanding of why unicorns are now navigating a more complex path to the public markets and why the IPO calendar is far less crowded than it once was.