After a muted second half performance in prior years, rising investor confidence and a generally improving economic environment contributed to robust IPO activity in the second half of 2013. Momentum in the capital markets led to the best IPO performance of the year in Q4 and set the stage for a strong 2014. Across the globe, 64 technology companies went public and garnered US$11.4bn in total proceeds in 2013.
There were 25 global technology IPOs in Q4 2013 with total proceeds of US$5.6bn, an increase of 213% in volume and 316% in dollar value over Q4 2012. The month of October witnessed 10 IPOs, November witnessed 11 IPOs, and the year ended with four technology IPOs issued in December.
China, which had a muted market owing to the freeze by the CSRC, had six technology offerings on other exchanges in Q4 2013, raising US$899mn. Eleven technology IPOs from Europe and Asia Pacific (excluding China) were priced in the last quarter of 2013 for total proceeds of over US$1bn.
Internet Software & Services and Software remained the most active subsectors in 2013, with 66% of total deals and 64% of total proceeds as compared to 49% of total deals and 87% of total proceeds in 2012. The continued demand for innovative software tools to improve performance of products and services both within and outside the technology industry is fuelling this growth.
Relatively speaking, US IPOs appeared strong due to the IPO freeze in China. US companies led technology IPOs with 66% of total proceeds and 55% of total deals. This compares to 88% of total proceeds (primarily due to Facebook IPO of US$16bn) and 46% of total deals in 2012. The US also recorded the top five technology IPOs of the year, including the only IPO over US$1bn, Twitter Inc.
US companies led Q4 technology IPOs with 32% of total deal volume, contributing eight of the 25 IPOs, and also led in proceeds contributing 61% of total dollars. Non-US companies’ total deal value was US$2.2bn and amongst them China contributed the most in both volume and value by 24% and 16%, respectively.
As evidenced by the fall in the VIX (Volatility Index), investor confidence has been on the rise and this has served to motivate technology companies from a diverse group of countries to go public. In Q4, companies from Japan, Singapore, the UK, Canada, France, Germany, Israel and Taiwan contributed US$1.3bn or 23% of proceeds. Also, 44% of the deal volume was from these geographies indicating an expanding and strengthening global technology IPO market.
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