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 40 IPOs and US$12.1bn in proceeds. Compared to the 17 deals in Q2’13, the number of Q2’14 deals increased by 135% and total proceeds grew by 322% (Q2’13 = US$2.9bn). The number of technology IPOs increased 54% over the prior quarter and the average issue size also moved higher (US$303.0mn 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 (20) with proceeds of US$5.1bn; 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 two IPOs which raised US$315mn, a 28% increase in amount raised quarter over quarter with the same number of deals. There were no semiconductor IPOs in Q2’13 due in large part to the China IPO freeze. Of the two semiconductor IPOs this quarter, one was from US and the other was a Chinese company.
The geographic distribution of technology IPOs in Q2’14 was spread across 10 nations with the US, China and UK leading the way. The US and China recorded the most activity with 35% (14) and 33% (13) 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$289.1mn. The US raised US$4.0bn; followed by China which raised US$3.7bn and the UK at US$3.1bn. Other territories included in RoW had seven deals raising US$1.3bn.
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