Klarna Group Plc signage during the company’s initial public offering (IPO) at the New York Stock Exchange (NYSE) in New York, US, on Wednesday, Sept. 10, 2025.
Michael Nagle | Bloomberg | Getty Images
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Even as the IPO market is starting to rebound, startups are staying private for longer thanks in large part to alternative capital, according to new data.
The median age of companies that have gone private so far this year is 13 years since founding, up from a median of 10 years in 2018, according to new data from Renaissance Capital.
A separate, recent study by Jay Ritter at the University of Florida found that between 1980 and 2024, the average age of companies going public has more than doubled.
Companies going public also have much larger revenue, since they’re maturing longer in private hands. In 1980, the median revenue for IPO companies was $16 million, or $64 million in inflation-adjusted 2024 dollars. By 2024, their median revenue had soared to $218 million, according to Ritter’s study.
The number of so-called “unicorns,” or private companies with valuations of more than $1 billion, has swelled to over 1,200 as of July, according to CB Insights. OpenAI’s valuation of $500 billion, notched with last week’s sale of employee shares topped SpaceX’s $400 billion valuation to become the world’s most highly valued private company.
Analysts and economists largely blame the regulatory burden and short-term pressures associated with being a publicly traded company for the urge to stay private. Yet the surge in alternative investments and private capital – from sovereign wealth funds and family offices to venture capital, private equity and private credit – are providing more than enough capital for today’s tech startups.
Global private-equity assets under management have risen over 15% a year over the past decade to over $12 trillion, according to Preqin. Over the next decade, they’re expected to double to around $25 trillion.
Venture capital assets under management in North America are expected to increase from $1.36 trillion at the start of 2025 to $1.8 trillion in 2029, according to PitchBook.
“One of the main reasons for going public is to raise capital,” Ritter said. “Now there are a lot of good alternatives to raising capital without going public.”
Ritter said that the growth of new digital marketplaces for selling shares of private companies – like Forge Global and EquityZen – give employees liquidity for their equity instead of having to wait for an IPO.
Klarna, the Swedish fintech startup, was founded 20 years ago and experienced wild swings in valuation before going public last month. It was valued at $45.6 billion in 2021 thanks to a funding round led by SoftBank, but saw its valuation plunge to $6.7 billion in 2022. Its funding along the way came from Sequoia Capital, IVP, Atomico, GIC and Heartland, the family office of Danish billionaire Anders Holch Povlsen.
Klarna’s current market cap is $15 billion.
While private equity and venture capital firms argue that the fastest growth stage for startups is in the early years, with the best returns gone by the time they go public, Ritter said the evidence is more complicated. While returns for private equity and venture capital have outperformed public markets in the past, he said the rush of capital flowing into alternatives and the huge prices paid by private investors for assets in recent years could mark a turning point.
“Money flows into an asset class as long as there are abnormal returns,” he said. “But so much money has poured in, I don’t expect there to be abnormal returns in the future.”
