Global Technology IPO Review: Q2 2015

Global Technology IPO Review: Q2 2015

Q2 results

The second quarter of 2015 observed 36 technology companies go public across 11 countries, with US$6.2 billion raised. In terms of number of IPOs, this represents a 57% rise over the first quarter of 2015, but the aggregate amount raised remained flat in Q2 resulting in average proceeds declining 35%. The decrease in proceeds was due to a lack of big-ticket IPOs this quarter. The largest technology IPO of the quarter and year to date (YTD) was FitBit Inc, a US wearables company that raised US$841 million. In contrast, in the second quarter of 2014, there were three IPOs with proceeds of US$1 billion or more (IMS Health Holdings Inc, JD.com, Markit Ltd). Over the last six years, Q3 2014 recorded the highest proceeds ever of US$24.8 billion, due to the US$21.8 billion Alibaba IPO. The lack of big-ticket IPOs can be attributed to market volatility and the increasing number of start-ups with billion-dollar valuations.

Q2 2015 Global technology IPO trends
 

Subsector distribution

Consistent with the past few quarters, Internet Software & Services again recorded the most offerings: 16 IPOs and US$2.3 billion in proceeds. It was followed by the Software sector with six IPOs and US$1.8 billion in proceeds. Computers & Peripherals came in third with five IPOs and US$1.12 billion raised.

Compared to last quarter, Internet Software & Services had a 100% increase in the number of IPOs, but the proceeds dipped by 32%. The Software sector also performed well, with a sequential increase of 200% in terms of number of IPOs and 376% in terms of proceeds. Year over year, Computers & Peripherals had a 400% increase in number of IPOs and a 44% increase in proceeds raised. In the Electronics sector, the number of IPOs increased by 100%, but proceeds dipped by 47%.

Q21 2015 IPO subsector distribution  

In Q2 2015, the geographic distribution was across 11 countries. In terms of proceeds the US led with US$2.8 billion and 11 IPOs, followed by Europe with five IPOs and US$1.3 billion of proceeds. China came in at US$1.0 billion with 14 offerings, while Canada and the Rest of the World raised US$265 million (2) and US$859 million (4), respectively. Rest of World countries included Australia, with the second largest IPO of the quarter (MYOB Group Ltd, US$668 million), Israel, Taiwan and Japan with one IPO each.

US technology IPOs bounced back from a slow first quarter with growth of 95% and 175% in terms of total proceeds and number of IPOs, respectively. However, year-over-year results lagged Q1 2014, down 32% in proceeds and 21% in number of IPOs. Europe had five IPOs with proceeds of US$1.3 billion. Compared to the first quarter, total proceeds declined by 58% in Europe, and though the total number of global technology IPOs declined only marginally year over year (36 versus 40), proceeds dropped by 49% due to a lack of billion dollar offerings.

Q2 2015 Geographic distribution of global technology IPOs
 

Raman Chitkara

Global leader
Technology
+1 (408) 817 3746

Jianbin Gao

China and Hong Kong leader
Technology
+86 (21) 2323 3362

Jass Sarai

UK leader
Technology
+44 01895 52 2206

Alan Jones

US Technology Deals Partner
+1 (408) 667 0985

Pierre Marty

European leader Technology
+33 1 5657 58 15
 
   

Analysis & opinions

Technology IPO market insights
"The year 2015 started on a promising note with china and Europe contributing a large number of IPOs. Chinese stock exchanges performed well due to simplified rules and higher valuations. Given high pre-IPO valuations and market volatility, the remainder of 2015 may stay on pace with the first quarter, but likely not surpass 2014."

-- Raman Chitkara, Global Technology Industry Leader, PwC
Technology IPO market insights
"While there are a number of Chinese technology companies in the US IPO pipeline, we anticipate significant growth of technology listing in domestic exchanges as a result of both the new registration based system and increased valuations."

-- Jianbin Gao, Technology Industry Leader, PwC China
Technology IPO market insights
"The start of 2015 saw a significant drop-off in US technology IPO listings driven by the abundance of late stage crossover rounds at 'unicorn' valuations and the delay of several IPOs by a number of venture backed technology companies. Looking ahead, the IPO pipeline remains strong which bodes well for an uptick in technology IPO activity in the months ahead."

-- Alan Jones, Deals Partner, PwC US
Technology IPO market insights
"The UK Tech IPO market continues to thrive, in particular on those businesses which are disrupting business models through the use of new technology. The focus on changing consumer practices continues to pay dividend"

-- Jass Sarai, Technology Industry Leader, PwC UK