Global technology IPO Review: Q2 2017

Best quarter in two years based on volume: 28 IPOs, including four Unicorns*

Global Tech IPO market has best quarter in two years

After a positive start to the year, Q2 2017 saw an increase in technology IPOs. The number of listings rose 56% quarter over quarter and 100% year over year. Proceeds declined 12% from the previous quarter, but increased 246% year over year.

 

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Average proceeds drop in Q2 2017, partly due to more realistic pricing and modest Unicorn proceeds

Although the volume of tech IPOs rose substantially in Q2, average proceeds declined from US$323 in Q1 to US$183 in Q2 owing to smaller offerings including three of the four Unicorns garnering less than US$600 million in aggregate.
 

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The Asian tech IPO market takes center stage this quarter

Asia reported 19 technology IPOs, the highest for any region in Q2, with total proceeds of US$3.7 billion. China led with 16 IPOs, followed by South Korea with two and Israel with one.

 

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Q2 2017 has the most Semiconductor IPOs globally since 2010

The Semiconductor subsector matched Internet Software & Services – the perennial tech IPO leader – with eight IPOs in Q2 2107. Between them they had 16, more than half the total. 
 

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Q2 highlights

After a positive start to the year, Q2 2017 saw an increase in technology IPOs. Deal volume increased significantly as 28 IPOs raised a total of US$5.1 billion in the second quarter; the number of listings rose 56% quarter over quarter and 100% year over year. Proceeds declined 12% from the previous quarter, but increased 246% year over year.

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Q2 2017 had a wider geographic distribution than the prior two quarters with seven countries reporting technology IPOs. China led with 16, followed by the US with six and South Korea with two. The UK, Canada, Belgium and Israel had one IPO each.

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With 16 IPOs, China had the largest piece of the tech IPO market in Q2, with proceeds of US$1.2 billion. With this, China topped its numbers of the last five quarters.

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After three quarters of no IPOs, South Korea’s Netmarble raised the highest tech IPO proceeds globally in Q2 2017. Despite political turmoil, the Korean currency has grown stronger, along with stock prices.

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The US had six IPOs with total proceeds of less than a billion, a 50% improvement over the preceding quarter, though significantly below comparable historical levels achieved during strong IPO cycles. Proceeds equaled US$764 million, also much lower than last quarter’s US$4.5 billion, most of which was from the Snap IPO.

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Analysis & opinions

"Looking ahead, we expect the second half of 2017 to continue the positive momentum of the first half. However, investor sentiment could change in a hurry as a result of a significant negative political development or increased volatility in the capital markets.”

Raman Chitkara Global Technology Industry Leader, PwC US

“While favorable market factors led to an excellent second quarter for tech IPOs in South Korea, the second half of 2017 may not prove as robust due to several major companies postponing their listings."

Steven Kang Technology Industry Leader, PwC South Korea

“Though Chinese tech IPOs continued their escalating trend in Q2 2017, there have been signs that China regulatory authorities (CSRC) may slowdown the IPO approval process in the second half of 2017. In spite of this, number of Chinese tech IPOs is still expected to reach a historical high in 2017, due to the increase of small to medium sized deals.”

Jianbin Gao Technology Industry Leader, PwC China

“Six tech IPOs raised $764 million representing a 50% increase in volume from Q1 despite several “down round” IPO valuations. The buy side took advantage of a buoyant US Tech IPO market as it outperformed the broader US IPO market with returns averaging 20%, almost double the 11% return of the broader IPO market.”

Alan Jones Technology Deals Partner, PwC US

*Issue size greater than US$40 million (includes overallotment) and based on trade date.

Contact us

Raman Chitkara
Global Technology Leader, PwC US
Tel: +1 (408) 817 3746
Email

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