The New Zealand Stock Exchange didn’t welcome a single technology company IPO in 2025, marking the fourth consecutive year without meaningful tech listings as the market continues to struggle with valuation expectations and investor appetite.

The NZX had hoped that 2025 would mark a return to capital markets activity after the difficult 2022-2024 period, but that hope didn’t materialise. Several companies that had been mentioned as potential IPO candidates chose alternative paths—raising private capital, pursuing trade sales, or simply deferring liquidity plans.

Xero remains the only truly successful technology IPO from New Zealand’s modern era, having listed on the NZX in 2007 before eventually moving its primary listing to Australia. The company’s current market capitalisation of around AUD 15 billion stands as a reminder of what’s possible, but also highlights how exceptional that outcome was.

Several factors explain the continued IPO drought. First, valuations available in public markets remain substantially below what late-stage private companies achieved in fundraising rounds during 2020-2021. Companies that raised capital at, say, $200 million valuations are unwilling to accept $120 million public market valuations, even if that’s what investors will pay.

Second, the NZX itself lacks sufficient technology-focused institutional investors. The local investment management industry remains oriented toward traditional sectors—utilities, property, industrials. When technology companies do list, they struggle to find enough natural buyers to support liquid trading.

Third, regulatory and compliance costs for listed companies in New Zealand are substantial relative to company size. A company with $20-30 million revenue faces ongoing listing costs that can exceed $500,000 annually, which meaningfully impacts economics. For many companies, it’s simply cheaper to remain private.

The ASX represents an alternative listing venue for New Zealand companies, but the track record there is mixed. Several New Zealand companies that listed in Australia have struggled with investor interest and liquidity. The Xero exception proves difficult to replicate.

Looking at specific companies that had been mentioned as IPO candidates, Vend (now Lightspeed) was acquired by a Canadian company before any IPO occurred. Timely, the appointment booking software company, raised growth capital but remained private. Sharesies, the retail investment platform, continues growing but has shown no indication of IPO plans.

The venture capital community in New Zealand increasingly accepts that exits will come primarily through trade sales rather than public listings. This shifts the focus toward building companies that appeal to strategic acquirers rather than public market investors. The skillsets and business models required are different.

Private equity has filled some of the gap that public markets left, with several New Zealand PE firms making investments in growth-stage tech companies. However, PE capital comes with different expectations and timelines than public market capital, and it’s not available to all companies.

Employee share ownership schemes at private New Zealand tech companies are grappling with liquidity challenges. Employees who joined companies 5-7 years ago expecting IPO liquidity events are instead facing continued private ownership with uncertain exit timelines. Some companies have implemented buyback programs to provide partial liquidity, but these are limited in scale.

The government’s various initiatives to support the tech ecosystem haven’t addressed the fundamental challenge of market depth. Programs that help early-stage companies get started don’t solve the problem of what happens when those companies reach scale and need growth capital or exits.

Interestingly, several New Zealand software companies have adopted the “bootstrap to profitability” approach rather than pursuing venture capital and eventual IPO. Companies like Vxt (the voicemail transcription service) and Joyous (the employee listening platform) are growing sustainably without external capital. This represents a viable path but produces different outcomes than the high-growth venture model.

The SaaS model that many New Zealand tech companies have adopted is actually well-suited to private ownership. Companies can grow steadily, generate increasing cash flow, and potentially return capital to shareholders without needing public markets. The IPO becomes optional rather than necessary.

Looking at comparable markets, Australia’s IPO market for tech companies was similarly quiet in 2025, though at least a few smaller listings occurred. The ASX saw perhaps 3-4 technology IPOs during the year, generating limited investor enthusiasm. Singapore and Hong Kong, which had been alternative listing venues for some Australasian companies, were equally quiet.

The SPAC wave that brought some companies public in 2020-2021 has completely receded. Several of those deals have subsequently performed poorly, creating cautionary tales that make the SPAC path even less attractive now than traditional IPOs.

Secondary markets for private company shares have developed somewhat, allowing employees and early investors to achieve partial liquidity without full company exits. Platforms facilitating these transactions have become more active, though volumes remain limited and pricing is often uncertain.

The impact of the IPO drought extends beyond just the companies seeking to list. Investment banks in New Zealand have seen their equity capital markets teams shrink significantly. Lawyers specialising in IPOs have less work. The entire ecosystem supporting public listings has atrophied somewhat.

What would it take to restart the IPO market? Most market participants suggest several conditions would need to align. First, private company valuations need to fully reset to levels consistent with public market multiples. Second, a few successful listings need to occur and perform well, demonstrating that the path can work. Third, market conditions need to improve such that investors are willing to take on risk.

None of these conditions appear likely to materialise in early 2026. The consensus view among investment bankers and advisors is that the IPO window will remain essentially closed through at least the first half of the year, with a possible modest reopening in late 2026 if broader market conditions improve.

For New Zealand’s tech ecosystem, this means continuing to build companies with the expectation that exits will come through trade sales to strategic acquirers rather than public listings. It’s a viable model—many successful companies have been built this way—but it does limit the scale of potential outcomes compared to what public market paths can offer.