• Allocation mechanics lead to favorable IPO anchor discussions
• Issuers navigate wider array of options in last mile before listing

A pickup in US IPO issuance and rising expectations for a wave of blockbuster listings are not reducing the role of private capital for companies approaching the public markets.

As we get further into 2026, late-stage fundraisings continue to feature prominently even as confidence builds around IPO windows, with issuers using private rounds to engage investors more meaningfully and advance execution while preparing to list, market participants said.

Even as issuers grow more comfortable contemplating near-term listings, late-stage private placements are increasingly being treated almost as a necessary part of IPO preparation rather than a parallel process, said one ECM syndicate banker. Conversations that once took place during IPO marketing are now happening much earlier in a company’s lifecycle.

“Most of the big mutual funds have put in place dedicated teams to help evaluate the private placement opportunity,” the banker said. Those teams often invest directly alongside public portfolio managers, allowing institutions to establish exposure ahead of a listing rather than relying solely on IPO allocations, the banker added.

Allocation mechanics are a central driver of that behavior, the banker said. In a USD 500m IPO, even the largest allocations are typically limited, while private placements can allow investors to deploy USD 100m or more in a single transaction.

Private rounds are also increasingly used to identify cornerstone investors ahead of an IPO, helping anchor demand and reducing execution risk, particularly for larger offerings, the banker said.

He pointed to the scale of private capital relative to public issuance: roughly USD 330bn was raised in private placements last year on the equity side alone, compared with about USD 47bn in US IPO proceeds.

For many issuers, late-stage private capital is increasingly serving as a proving ground, according to Daniel Klausner, ECM managing director at Houlihan Lokey. “Private markets are still strong, and companies want to battle-test themselves before going public,” Klausner said.

He pointed to issuers raising private capital while actively preparing for listings, including companies that complete pre-IPO convertible financings shortly before launch.

Klausner said prior IPOs that priced below their last private valuations have made private investors more cautious, increasing the appeal of late stage rounds ahead of public market scrutiny.

In response, banks and advisory firms have been expanding capabilities and reorganizing internally to engage issuers earlier in their lifecycle and capture a growing share of late-stage growth equity, structured transactions, and pre-IPO liquidity work, this news service has previously reported. At Moelis, late-stage private capital is expected to remain central even as IPO activity builds.

“I still think late-stage growth is going to be a huge part of the market in 2026,” said Angus Whelchel, managing director and head of private capital markets at Moelis. “That’s one of the reasons we have added senior MD resource to the product to help us with that growth.”

Whelchel said many companies are actively working through IPO timing but still require capital in the interim. “Some of these companies are working through IPO timing, but they still need liquidity for growth,” he said.

Secondaries are increasingly being used to manage that transition or their positions in the company, rather than as a signal of urgency, said David Koch of Koch Capital Advisory. “People are either monetizing some of their stake or creating secondary markets for others to come in ahead of the IPO,” Koch said.

Moelis’ Whelchel said secondary capital is becoming a critical tool for more mature issuers. “I think the secondary element of capital raising for seasoned companies is also going to be an important demand driver in 2026,” he said. “For these companies, secondary liquidity becomes a way to keep going without forcing an IPO.”

Beyond equity, the growing availability of private credit is also extending how long companies can remain private, said one consultant.

These solutions are less about avoiding IPOs and more about sequencing them more carefully, the consultant said. “It’s really a healthy platform for companies to grow, scale, and prepare themselves to look and act like public companies when the time comes.”

Private capital moves closer to the finish line

That sequencing is increasingly visible among companies nearing IPO readiness across sectors.

AI hardware company Cerebras Systems and AI infrastructure provider Lambda have both raised multi-billion-dollar late-stage rounds while evaluating potential public listings in 2026, as reported.

Data-center operator Crusoe is in discussions with banks about an IPO as soon as next year after raising USD 1.375bn in a late-stage round, while defense technology group HawkEye 360 has selected lead underwriters and completed a USD 150m equity- and debt-backed acquisition as it prepares for a potential 2026 listing.

Battery recycling and energy storage company Redwood Materials recently closed a USD 425m late-stage financing backed by existing and new strategic investors.

Not every company follows the same path. Some issuers move directly toward an IPO when investor reception is strong, while others continue to raise privately even as listing plans take shape, said Daniel Polsky, managing director at William Blair.

Some of the most closely watched private companies continue to attract late-stage capital, particularly across artificial intelligence, where investor demand remains intense even as IPO plans take shape, bankers said.

Record levels of late-stage liquidity helped delay several AI listings, as private markets absorbed demand that might otherwise have moved to public offerings.

That dynamic is still playing out. In late January, Anthropic, which is working toward a listing this year, reportedly closed its latest funding round above the initial USD 10bn target, securing a USD 350bn valuation. The figure could rise if Microsoft and Nvidia decide to contribute, the CNBC report said.

Even for companies accelerating toward the public markets, another private step is still emerging.