In a surprising turn of events, shares of tech darlings Figma (FIG), Circle (CRCL), and Chime (CHYM) have lost significant gains following their highly anticipated initial public offerings (IPOs) this year.
Initially soaring with impressive debuts, these companies captured the attention of investors with their innovative solutions in design software, stablecoin issuance, and mobile banking, respectively.
Behind the Decline: Market Realities Hit Hard
Recent market volatility, coupled with broader economic concerns such as rising interest rates, has dampened investor enthusiasm for high-growth tech stocks.
Circle, which saw its shares surge over 120% on its first trading day in June 2025, has recently dropped by 13% in just a week, as reported by Nasdaq, reflecting post-earnings jitters and a secondary offering.
Figma, whose stock tripled after its 'bellwether' IPO in July 2025 according to Morningstar, is now facing scrutiny over its ambitious $13 billion valuation amidst competitive pressures from giants like Adobe.
Historical Context: A Boom and Bust Cycle
Historically, tech IPOs have often followed a pattern of explosive debuts followed by sharp corrections, as seen with companies like Uber and Lyft in previous years.
Chime, which debuted strongly on June 12, 2025, as noted by Kiplinger, is also experiencing a pullback, with investors questioning the sustainability of its no-fee banking model in a tightening economic environment.
Impact on Investors and the Broader Market
The downturn in these tech IPO stocks has broader implications, potentially signaling a cooling period for the IPO market that had shown signs of revival earlier this year.
For investors, the volatility underscores the risks of betting on high-valuation startups without proven long-term profitability, even as these companies remain leaders in their respective fields.
Looking Ahead: Can They Rebound?
Looking to the future, analysts are cautiously optimistic, pointing to Circle’s USDC adoption growth and Figma’s potential to hit $1 billion in revenue in 2025, as reported by The Motley Fool, as reasons for hope.
However, the road ahead for Chime’s profitability and Figma’s competition with Adobe will be critical in determining whether these tech stars can regain their lost momentum and investor confidence.
As the tech sector navigates these turbulent waters, the performance of these venture-backed IPOs will likely serve as a litmus test for other late-stage startups eyeing public markets in 2026.
Alfred Lee
