Israeli Tech Eyes Wall Street: Will the IPO Freeze Finally Thaw in 2025?

2025-02-11

The initial public offering (IPO) market has been in a deep freeze for tech companies over the past few years, with many firms delaying or completely withdrawing their public market aspirations. However, as 2025 approaches, a cautious optimism seems to be growing within Israeli tech firms, signaling the potential for a revival. With several Israeli tech companies preparing to list on Wall Street and market analysts offering mixed but hopeful opinions, the question remains: Will the IPO freeze finally thaw in 2025?

After several years of stagnation, Israeli tech companies are beginning to explore IPOs again, some of which have already taken the initial steps. Companies like eToro, AppsFlyer, Wiz, and Rapyd have publicly expressed intentions to go public soon, while others, including Snyk, Odysight.ai, and Deel, are also making their IPO intentions known. The 2025 VC Survey, conducted by CTech, reveals mixed investor sentiment on whether 2025 will indeed be the year of a full recovery for the IPO market. Some investors remain confident that the thaw is imminent, while others caution that recovery will be gradual. This article takes a closer look at the current state of the Israeli tech IPO market, the preparations underway, and the factors influencing investor sentiment.

Market Recovery: Signs of a Thaw

Israeli tech companies, which have long dominated the startup landscape, are beginning to signal their readiness for IPOs. Some major players, like eToro, have already submitted confidential prospectuses. In January, eToro, a fintech firm with a valuation target of $5 billion, filed for an IPO on Wall Street. This follows their failed attempt at a SPAC merger in 2021, which was set at a valuation above $10 billion but ultimately fell through.

Similarly, AppsFlyer has been taking steps toward an IPO, though it recently laid off 7% of its workforce. The company, which provides app owners with tools to optimize their user acquisition strategies, currently employs 1,400 people and reports annual revenues of $400 million. Industry analysts speculate that these layoffs are part of a strategy to streamline operations ahead of their IPO.

Wiz, a cybersecurity unicorn, has also set its sights on the public market. The company aims to reach $1 billion in annual revenue by 2025 before launching its IPO. Similarly, Rapyd, an Israeli fintech company, has consistently mentioned the possibility of an IPO, though they are waiting for the right moment to take the plunge.

These companies, among others, are preparing by refining their financial reports, undergoing audits, and making business adjustments such as cost-cutting measures, all in an effort to meet the expectations of potential investors. This suggests a growing readiness in the Israeli tech sector to return to the IPO market.

What Undercode Says:

The anticipation of a possible IPO revival in 2025 is creating a buzz in the Israeli tech ecosystem. However, the future remains uncertain, with different groups of investors holding varying views on the likelihood and scale of a market recovery.

The Optimists: A number of investors are optimistic about the IPO market’s return. According to Avi Feldman, Managing Partner at Mobilion Ventures, there are early signs of improvement in global capital markets that suggest the IPO drought might soon end. Barak Rabinowitz from F2 Venture Capital agrees, stating that “the IPO window is set to reopen in 2025.” Many investors believe that a backlog of companies ready to go public will fuel a surge of IPO activity, potentially even surpassing pre-crisis levels. Some are especially confident in the stabilization of interest rates and strong performance from public markets, which could facilitate the return of IPOs across different sectors and regions.
The Cautious: Despite the growing optimism, some investors remain cautious about the timing and pace of the IPO market recovery. According to Amplefields Investments, while they agree that the IPO freeze may soon ease, they stress that the recovery will be slow and selective. Companies will need to be particularly strategic, balancing their timing, valuation expectations, and overall readiness. For example, 10D Ventures argues that the recovery is likely to be gradual and may depend heavily on factors like interest rates and broader macroeconomic conditions. Similarly, NFX suggests that while some recovery could start in late 2025, a significant rebound may not occur until mid-2026.
The Skeptics: A few investors are skeptical about an immediate revival. OurCrowd, for example, points out that the prolonged IPO drought has led to a liquidity crisis for venture funds, and while recovery is necessary, it may not be imminent. YL Ventures acknowledges the potential for a resurgence in the cybersecurity sector but believes most cybersecurity firms will likely wait until 2026 before going public. In addition, geopolitical instability and sector-specific challenges could delay the global recovery, according to investors like Peregrine Ventures. Some venture firms, like Blumberg Capital, believe that M&A (mergers and acquisitions) might remain a more likely exit strategy for companies in the short term, rather than a return to IPOs.
The Wait-and-See Approach: There is a group of investors who refrain from making definitive predictions on the future of IPOs. SeedIL Ventures admits there is no clear visibility on the situation, and early-stage investors like TLV Partners note that while macroeconomic trends seem encouraging, predicting the timing of the IPO recovery is still uncertain. S Capital also takes a pragmatic stance, stating that IPOs will occur when companies are truly ready, without rushing into an uncertain market.

Conclusion:

The current state of the IPO market, especially for Israeli tech companies, reflects a cautious optimism tempered by uncertainty. While there are numerous signals suggesting that the IPO freeze may be on the verge of thawing, multiple factors—such as interest rates, macroeconomic conditions, and investor sentiment—will play a crucial role in determining whether 2025 will be the year of recovery. For now, Israeli tech firms are preparing themselves to navigate the complexities of a post-freeze IPO market, and the varying views from investors suggest that the thaw, if it comes, could be gradual but significant. Whether the IPO market experiences a full recovery or remains somewhat subdued will depend on how companies and investors adapt to the changing global landscape.

References:

Reported By: Calcalistech.com_febe8e89e396bc07ccde6c0a
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