Despite a turbulent 2025, public markets are heating up again. Luke Sikora of J.P. Morgan Growth Equity Partners explains why the optimism may last, how startups are using M&A for AI advantage, and why investor discipline could outlive the rate-hike era.
Policy-induced market jolts since the return of Donald Trump to the White House have generated waves of uncertainty — and, somehow, somewhat consistently, returns to a form of stock-market ebullience and optimism. Despite tariffs, POTUS interference in Fed affairs, household-level financial precarity, and much more, public markets keep creeping upward.
According to Luke Sikora, Partner at J.P. Morgan Growth Equity Partners, public-market optimism in the form of IPO activity may stick around through the end of the year and into 2026. We interviewed Sikora to make sense of the economic and technological dynamics he’s eyeing from his perch — such as the relationship between AI and supply chains, interest rates and investor discipline, and more.
The following has been edited for length and clarity.
In previous interviews — paraphrasing a little — investors have told Fintech Nexus that we’re in the midst of an “IPO window,” with tariff-induced volatility, credit crunches, and household shocks not yet fully reflected in public markets, making for an advantageous time to exit. Do you agree with that notion? How are you making sense of current IPO activity?
Since Liberation Day, market conditions have stabilized following initial volatility and uncertainty as tariffs appear to have been effectively priced in across the market. The IPO market has shown signs of recovery with increased filing activity and a number of successful public debuts. On average, these recent IPOs have been trading up from their initial offerings, supported by strong investor demand. We have seen an encouraging diversity of successful IPOs across technology subsectors, including software, fintech, defense technology, and advertising. Investor appetite has also expanded to both large-cap IPOs and smaller market cap companies. We believe this improved backdrop well positions the market for increased IPO activity for the remainder of this year and into 2026. This is something we are following closely.
You’ve invested in Loop, a supply chain spend-management platform helping enterprises weather supply-chain and tariff volatility. What kinds of insights have you gained from the Loop investment that you can share with other portfolio companies that confront macroeconomic uncertainty?
Although supply chains have faced volatility for years, the supply chain spend-management market has historically been underserved by technology. In this era of AI transformation, data has become a vital asset for companies looking to gain a competitive edge. By harnessing complex data through advances in AI, companies can evolve into systems of intelligence while raising barriers to entry within their industries. This is evident with traditional industries like supply chain management, as demonstrated by Loop.
Startups can acquire data advantages both organically and inorganically. While not a fit for all, we believe that M&A can be an effective strategy for AI-focused startups. For example, Loop recently acquired Data2Logistics (D2L), one of the oldest service providers in the freight audit and payment space. This acquisition provides Loop with decades of global domain expertise, a large base of referenceable customers and use cases, and importantly, a massive data set to further advance Loop’s AI platform. D2L marks Loop’s second acquisition since its inception.
What sectors or verticals are you most excited about investing in right now? Has AI shifted your thesis, especially in terms of defensibility for startups in an era where AI capabilities are rapidly commoditizing?
We’re particularly excited about the AI opportunity across three main areas: the foundational model layer, the infrastructure layer, and the application layer. Similar to Loop, the majority of our software portfolio companies are harnessing data and AI to build long-term competitive advantages and growth opportunities. It is important for these companies to not only act as systems of record for their customers, but to also leverage AI to become systems of intelligence while increasing automation and the overall value they deliver.
Within AI, we have been most active in pursuing opportunities in the infrastructure and application layers. Within the application layer specifically, we have backed a number of vertically focused software companies like Loop, including Albert Invent for materials science, AlphaSense for investment research, and Rogo for investment banking.
Post-Covid interest-rate hikes forced firms of all stripes to consider the fundamentals of their investments, and to consider the role of cheap capital in the business models they back. Do you foresee this kind of discipline staying de rigueur once rates come back down? How might investment practices change, if at all?
Following our fundraise in late 2021, we took a disciplined approach to deployment in the first few years, choosing to sit out of situations where investor capital was treated as a commodity. As a result, we have benefited from ample dry powder, enabling us to capture more attractive investment entry points in high growth, transformative startups. The rise of AI has created an elevated funding environment, and lower rates will likely further increase the volume of funding and valuations. No matter how the macro environment evolves, we remain focused on investing in businesses with strong fundamentals and durable growth potential.
