Global technology IPO activity, which took off in the last quarter of 2013 continued and gained speed in Q2’14. The technology sector surpassed expectations in the second quarter, with 43 IPOs and US$12.3bn in proceeds. Compared to the 17 deals in Q2’13, the number of Q2’14 deals increased by 153% and total proceeds grew by 327% (Q2 ‘13 US$2.9bn). Though the number of technology IPOs increased 65% over the prior quarter, the average issue size in Q2‘14 was only marginally higher (US$285.1mn versus US$263.0mn). An improving Eurozone led to the return of technology IPOs in Europe with listings on the London Stock Exchange (LSE) and one on Euronext in Paris.
In Q2’14, the Internet Software & Services sector had the most IPOs (21) with proceeds of US$5.2bn; followed by 11 IPOs in the Software sector which raised US$3.1bn. Increasing Internet penetration, growing Ecommerce and rebounding consumer demand in the developing economies, and the shift from product to service across industry as a whole, is resulting in accelerating demand for Internet and software innovations.
The Semiconductor subsector had four IPOs which raised US$418mn, a 70% increase in amount raised quarter over quarter and a 50% increase in number of deals. There were no semiconductor IPOs in Q2’13 due in large part to the China IPO freeze. Of the four semiconductor IPOs this quarter, two were Chinese companies, one US and one from Israel.
The geographic distribution of technology IPOs in Q2’14 was spread across 10 nations with US, China and UK leading the way. The US and China recorded the most activity with 35% (15) and 33% (14) of total deals, respectively. Second quarter activity broadened geographically as the global economy continued to show improvement and investors’ confidence in IPO stocks further strengthened.
In terms of average proceeds, the UK with US$523.0mn was considerably higher than US with average deal size of US$272.6mn. The US raised US$4.09bn; followed by China which raised US$3.79bn and the UK at US$3.14bn. Other territories included in RoW had eight deals raising US$1.3bn.
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