Klarna Group PLC Signage was held on Wednesday, September 10th, 2025 at the New York Stock Exchange (NYSE) in New York, USA during the company’s initial public offering (IPO);
Michael Nuggle | Bloomberg | Getty Images
A version of this article was published in CNBC’s Inside Alts Newsletter. This is a guide to the fast-growing world of alternative investments, from private equity and private credit to hedge funds and venture capital. Sign up to receive future editions directly in your inbox.
New data shows that even though the IPO market is beginning to rebound, startups remain private, largely thanks to alternative capital.
New Renaissance Capital data shows that the median age of businesses that have been private so far this year is 13 years from the median 10 in 2018.
Another recent study by Jay Ritter of the University of Florida found that between 1980 and 2024, the average age of companies that are published was more than doubled.
Publicly available companies are making much more profitable as they mature longer in private hands. In 1980, the median revenue for IPO companies was $16 million, or $64 million adjusted for inflation at $2024. By 2024, median revenue had skyrocketed to $218 million, according to a Ritter survey.
According to CB Insights, the number of so-called “unicorns” or private companies valued above $1 billion had swelled to over 1,200 as of July. Openai’s $500 billion valuation, notched in the sale of employee shares last week, surpasses SpaceX’s $400 billion valuation, making it the world’s most valuable private company.
Analysts and economists primarily condemn the regulatory burdens and short-term pressures associated with being a publicly traded company. But from sovereign wealth funds and family offices to venture capital, private equity and private credit, alternative investments and surges in private capital provide enough capital for today’s high-tech startups.
Controlled global private assets have grown by more than $12 trillion, up over the past decade, up over 15% per year. Over the next decade, they are expected to double to about $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 publishing is raising capital,” says Ritter. “Now there are many good alternatives to raising capital without revealing it.”
Ritter said the growth of new digital markets to sell stocks in private companies such as Forge Global and Equityzen would give employees liquidity to their employees’ shares, instead of waiting for an IPO.
KlarnaThe Swedish fintech startup was founded 20 years ago and experienced a wild swing in ratings before it was released last month. It was valued at $45.6 billion in 2021 thanks to a funding round led by SoftBank, but in 2022 it plunged to $6.7 billion.
Klarna’s current market capitalization is $15 billion.
Private equity and venture capital companies claim that the fastest growth phase for startups is in the early stages, with the highest returns being made before they are published, but Ritter said the evidence is more complicated. Private equity and venture capital returns have outperformed the open market in the past, but he said a rush of capital has flowed into alternatives and the huge prices paid by private investors for assets in recent years could mark a turning point.
“As long as there is an extraordinary return, money flows into asset classes,” he said. “But with so much money being poured into it, I don’t think there will be any extraordinary profits in the future.”
