Global technology IPO Review: Q3 2017

Lack of Unicorns and US tech IPOs dampen Q3 results*

Global tech activity IPO slows in spite of record high capital markets

With 20 tech IPOs and proceeds of US$5.2 billion, the third quarter saw a 31% drop in volume and 15% decrease in proceeds from the prior quarter but an equal number of offerings and only marginally lower proceeds year over year (-3%).

 

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Number of offerings accelerate at the close of Q3, setting the stage for a robust Q4 

Tech IPOs picked up steam in the latter part of the quarter which suggests a stronger year-end. There were 13 tech IPOs in September, of which 8 were listed in the second half of the month.  

 

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Tech's center of gravity continues to shift to the East with Asia garnering 16 of 20 tech IPOs 

Ongoing demand for tech IPOs in China, continuing innovation in South Korea, and contributions from Japan and India led to stronger Asia numbers. A total of 16 IPOs garnered US$1.7 billion.

 

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Europe captures 56% of the proceeds with the two largest tech IPOs of the quarter 

The European IPO market has shown positive momentum in 2017. The region was a no-show in Q1 but picked up steam in Q2. The third quarter saw the quarter’s biggest IPO with Landis+Gyr Group AG raising US$2.4 billion.

 

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Q3 highlights

With 20 tech IPOs and proceeds of US$5.2 billion, the third quarter saw a 31% drop in volume and 15% decrease in proceeds from the prior quarter but an equal number of offerings and only marginally lower proceeds year over year (-3%).

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Q3 2017 had broad geographic participation, with nine countries listing at least one tech IPO.

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With eleven IPOs and proceeds of US$1.3 billion, Greater China (China and Taiwan) led the way. Proceeds increased 98% and the number of IPOs were up 22% year on year.

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Europe had its strongest quarter since Q4 2015 in terms of proceeds, led by the two largest offerings of the quarter. 

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South Korea’s tech IPO activity continued in Q3 with three IPOs though proceeds declined in the absence of billion plus listings.

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Analysis & opinions

"Continued strength in global capital markets and a robust pipeline of quality companies suggests a strong finish to the year.”

Raman Chitkara Global Technology Industry Leader, PwC US

“Consistent with our expectation, China tech IPOs slowed slightly in Q3 2017 after several quarters' escalation. We anticipate that the number of Chinese domestic TMT IPOs will remain stable at a relatively high level over the fourth quarter of this year. Further, Hong Kong IPOs are becoming attractive again for Chinese tech companies in view of recent strong market performance.”

Jianbin Gao Technology Industry Leader, PwC China

"The tech IPO market in Europe is slowly brightening compared to its initial weakness earlier in the year. In Q2, we already saw the IPO of Delivery Hero in Germany with almost $1 billion raised in addition to X-FAB Silicon Foundries in Belgium and Alfa Financial Software in the UK which both reached around $300 million. In Q3, Switzerland claimed the largest single IPO, globally, to the tune of $2.4 billion with Landis+Gyr, while Rovio Entertainment in Finland raised $500 million. Looking ahead, with European elections behind us and a healthy pipeline of new entrants, I expect the renewed momentum to continue through this year and into 2018."

Werner Ballhaus European Technology, Media and Telecommunications Industry Leader, PwC Germany

"Although we saw a poor start to tech IPO activity in Korea in Q1, it picked up in Q2 with companies in the Internet Software & Services and Semiconductor sectors. While we expect to see this continued momentum for the remainder of the year, a healthy pipeline, especially with artificial intelligence, robotics and electric vehicles, is expected to fuel tech IPOs through next year."

Steven Kang Technology Industry Leader, PwC South Korea

“Although activity in the Q3 2017 US Technology IPO market was relatively modest with only a single company raising $252 million, the pipeline for the remainder of the year remains robust with several offerings close to pricing and a strong pipeline of potential IPOs.”

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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