Private valuations face a reckoning as energy IPO window shuts

An investor who says they have made roughly 70 early-stage private investments sees some private-company valuations as inflated by abundant venture capital rather than underlying asset quality, and expects the gap with public-market realities to correct within perhaps two years, though the timing is uncertain.

In energy tech, small modular reactor company valuations peaked about a year ago and have since declined. Fervo had a strong first day and first weeks after going public a few months ago, but its shares then sold off, quickly closing the IPO window many energy-transition companies had hoped to use. For companies still needing substantial capital, weak post-IPO trading can make follow-on stock sales extremely difficult; some CEOs are weighing a lower-valued IPO against staying private and raising money from a smaller group of investors.