Fourth Quarter IPO Volume Up Slightly from Previous Quarter
NEW YORK, NY – Seventy-seven venture-backed initial public offerings (IPOs) raised $9.4 billion in 2015, marking a 40 percent decline in dollars raised compared to 2014, according to the Exit Poll Report by Thomson Reuters and the National Venture Capital Association (NVCA). For the fourth quarter, 16 venture-backed IPOs raised $2.2 billion, an 18 percent increase compared to the total dollars raised during the previous three-month period and up slightly compared to the number of offerings listed during the third quarter of 2015. Ninety-one venture-backed M&A deals were reported in the fourth quarter, 26 of which had an aggregate deal value of $3.6 billion, decreasing 48 percent compared to the third quarter of this year. For full year 2015, 372 M&A transactions were reported, with 84 deals combining for a disclosed value of $16.3 billion, the slowest full year period for venture-backed M&A since 2009.
“When you combine the increased investment activity by non-traditional investors via funding rounds of over $100 million with the recent trend of companies choosing to stay private longer, it’s not surprising to see venture-backed IPO activity down from last year. While some will say this decline should be cause for alarm, it’s worth keeping in mind that the total number of IPOs for the year is down only four percent compared to 2013 and up 60 and 54 percent from 2012 and 2011 respectively,” said Bobby Franklin, President and CEO of NVCA. “With more than 44 venture-backed companies currently filed publicly with the SEC for an IPO and more filing confidentially, the bench of companies seeking to make their debut on the public markets is deep and we are hopeful 2016 will be a strong year for venture-backed IPO activity.”
IPO Activity Overview
There were 16 venture-backed IPOs valued at $2.2 billion in the fourth quarter of 2015. By number of deals, quarterly volume was up slightly compared to the third quarter of 2015 but registered an 18 percent increase, by dollars, compared to the previous quarter.
Led by biotechnology companies, eight of the 16 offerings during the quarter were life sciences IPOs, representing half of the total listings in the fourth quarter.
By location, 13 of the quarter’s 16 IPOs were from U.S.-based companies. The largest U.S. offering of the quarter, Mountain View, California-based Pure Storage (PSTG) raised $488.8 million on the NASDAQ stock exchange on December 9th.
In the largest IPO of the quarter, Atlassian Pty Ltd (TEAM), a Sydney, Australia-based enterprise software company, raised $531.1 million and began trading on the NASDAQ stock exchange on October 6th. At the end of 2015, the company traded 43 percent above its $21 offering price.
Mergers and Acquisitions Overview
As of December 31st, 91 venture-backed M&A deals were reported for the fourth quarter of 2015, 26 of which had an aggregate deal value of $3.6 billion, a 17 percent decline compared to the overall number of deals reported during the third quarter of 2015, and a 48 percent decrease, by disclosed deal value.
The information technology sector led the venture-backed M&A landscape with 62 of the 91 deals of the quarter and had a disclosed total dollar value of $2.2 billion. Within this sector, computer software and services and internet specific deals accounted for the bulk of the targets with 37 and 14 transactions, respectively.
The largest venture-backed M&A transaction during the fourth quarter was Pandora Media’s $480.0 billion million purchase of Ticketfly Inc, a San Francisco, California-based provider of ticketing, marketing and analytics tools. Cisco System’s $453.0 million acquisition of Alpharetta, Georgia-based Lancope Inc ranked as the second largest venture-backed M&A deal during the quarter.