Baker McKenzie’s Global Capital Markets Practice Group released new IPO figures from the technology sector which show that 2017 has got off to a very strong start with 103 companies taking to the markets raising USD 12.1 billion. This is in stark contrast to 2016, when across the year, only USD 11 billion in capital was raised from 123 issuances, the majority of activity coming in the second half of the year.
Activity centres around three countries with companies from China, US and Korea accounting for close to 60% of all listings in H1 2017. Listings on domestic markets dominate, but capital raised by cross-border listing is up by 68% with USD 559 million from four deals.
Technology subsectors
Fintech capital raising is off to a slow start, with three IPOs raising USD 486 million, down from seven IPOs in the same period in 2016. A number of IPOs in this industry have pulled or delayed their IPOs from the public markets this year citing Brexit and weak investor demand. The deal flow from the healthtech subsector has also declined in the first half of 2017, with just one healthtech IPO raising USD 150 million. On the other hand, there has been a higher demand for software IPOs, in particular for enterprise software companies. Their reliable stream of revenue is proving more attractive than some start-up and consumer software companies.
Venture Capital/Private Equity backed IPOs
Capital raised from VC backed technology IPOs amounted USD 6.7 billion, accounting for 55% of capital raised from all technology IPOs, with PE backed IPOs accounting for 7% of total capital raised. VC backed technology IPOs are showing signs of recovery after a disappointing first half of 2016, raising just USD 629 million from 14 IPOs.
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