Global Technology IPO Review: Q3 2013

Global Technology IPO Review: Full-year and Q4 2013

Full-year

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.

IPO summary - Top 10 deals
 

Q4

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.

Sector distribution  

Sector distribution

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.

Sector distribution  

Full-year

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.

China

Q4

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.

China  

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

Bryan McLaughlin

Technology Deals partner, US
+1 (408) 817 3760

Greg Unsworth

Asia-Pacific leader Technology
+65 6236 3738
 
 
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Analysis & opinions

Technology IPO market insights
"Following the seasonal summer lull in July and August, the Global Technology IPO market rebounded strongly in September. The fourth quarter has started on a positive note, with September momentum continuing in October."

-- Raman Chitkara, Global Technology Industry Leader.
Technology IPO market insights
"The UK Tech market continues to demonstrate its strength in innovation and talent. Together these continue to drive growth in the market and achieving an IPO is much more realistic, albeit , it is only one way shareholders are considering realising value, driving growth or increasing brand awareness. Overall I believe the IPO market is getting stronger as more great ideas become reality."

-- Jass Sarai, Technology Industry Leader, PwC UK
Technology IPO market insights
"Technology companies that have planned and prepared effectively to navigate the challenges of public markets are entering the fourth quarter with the wind at their backs. The strong IPO momentum coming out of the third quarter is primarily powered by the software sector, which continues to reign supreme both in terms of technology venture funding and technology IPOs. In a volatile market, IPO investors welcome enterprises that deliver growth and predictability, and software particularly SaaS models, have the ability to deliver on that value proposition."

-- Bryan McLaughlin, Deals Partner, PwC US
Technology IPO market insights
"After the absence of Chinese IPOs in the first half of 2013, China’s technology market started to demonstrate its strong pipeline with two IPOs in Q3 2013 and a number of publicly announced registrations are expected to materialise in the next six months. The temporary shutdown of the Chinese capital market continues to drive Chinese companies to explore overseas exchanges as an exit channel."

-- Jianbin Gao, Technology Industry Leader, PwC China