Oct 29, 2025
The down IPO problem: Why public markets aren't buying the value story.
“Down IPOs” have struggled this year. Can Navan break this trend?
Day 1 trading does not bode well, with shares closing down 20%... and the data is not in their favor.
A big theme in VC this year has been the “down IPO,” an IPO priced below the company’s last private funding round. The goal is to price the IPO low enough so public investors see the value story.
Results are in. Most of 2025’s IPO class has completed their lock-up periods, and public markets are not buying the value story.
Of the 9 VC-backed down IPOs, 6 are flat or down since listing, in a year while the Nasdaq is up 25%.
Meanwhile, the 6 companies that IPO’d at a valuation higher than their last private round have a median return of almost +48% since IPO.
Signal or noise? The sample is small, but it echoes what we’re hearing across the market: tech investors still want growth, not value stories.
Thankfully, growth can reaccelerate! No better example than Circle, the best-performing IPO of the year, which debuted well below its last funding round valuation.
What do you think? Will Navan end its lockup period trading higher than IPO price? I'm certainly rooting for them.
Pre-IPO based on Caplight's data, post-IPO Yahoo Finance.
Past performance is not indicative of future returns. Investments in private companies are illiquid, as there is a limited secondary market for private company shares.
External sources:
https://navan.com/about/press/navan-increases-valuation-series-g