Pulse News

**A VC-Backed Startup Tempts Volatile Stock Market**

By Cory Weinberg

Mar 11, 2025, 2:54pm PDT

Venture capitalists backing Hinge Health, which sells software to help people dealing with chronic pain, were likely cheering on Monday when the company filed to go public. It turned out to be the worst day of the year for the stock market, with the S&P 500 falling nearly 3%.

Hinge was one of the few tech firms to attempt to go public this year, and the first with significant backing by venture capitalists. (Others, like Core Weave, mostly have backing from companies such as Nvidia or big lenders.) But the intense market turmoil of the past few days raises the question of whether this spate of companies will get out the door or whether the yearslong initial public offering malaise persists.

Hinge and Core Weave, a buzzy cloud provider, have told advisers in recent days that they are still all systems go, despite the market turmoil. Software firm Genesys, on the other hand, put its preparations on pause, I reported last week, due to market volatility.

All eyes now are on fintechs Chime and Klarna, as well as ticketing app StubHub, which have been gearing up to go public but haven't yet published their filings.

One positive sign came Tuesday when the dayslong market sell-off—sparked by Wall Street's fear of impending tariffs and their potential economic ramifications—reversed itself. Investors looked to grab deals on stocks that all of a sudden looked cheap. We'll see how long that trend lasts.

Regardless, bankers and other advisers I called on Tuesday have mostly written off the possibility of this year becoming even an average one for listings, which would mean a few dozen tech IPOs. Even Michael Grimes, one of tech's top bankers at Morgan Stanley, is reportedly taking a year off from the IPO game to go into government.

"The wave isn't until the second quarter next year, maybe the third quarter of next year," one adviser said. "But we've been saying that for a long time."

It's understandable why dealmakers might "wait till next year" once again. Volatile stock prices, of course, make it difficult for bankers and investors to settle on a price for IPOs. Founders and venture capitalists are still wary of selling their stock at a discount. Going public isn't really the cool thing to do in Silicon Valley anymore.

I've found in my two years writing about a relatively meager number of tech IPOs that management teams often have their own idiosyncratic reasons to accept the risks of going public in a rocky market. Sometimes those companies have debt hanging over them, whether in the form of employee stock grants or loans from investors; Service Titan and Arm Holdings fall into that category. Others are selling stock linked to a particular hype cycle: For instance, the growth of Reddit and CoreWeave is tied to artificial intelligence.

For Hinge Health, founded in 2014, it may just be the time to go public. The firm has enough revenue growth and cash flow margins to meet the common "rule of 40" threshold. And Hinge executives have told advisers recently they are confident they can continue to forecast their business well enough to have predictable quarters. Sometimes that's enough.