Tech IPO Landscape in 2017
In March, the tech industry saw its first Initial Public Offering (IPO) of the year by social media platform, Snapchat’s parent company, Snap Inc. While they’ve enjoyed minimal fluctuations in the first months of its IPO, the company’s shares have since fallen. The decline was further exacerbated by the end of the IPO’s lockup period. Snap shares may have bottomed out after the expiry of the lockup period, and market watchers are expecting the stock to normalise and possibly move upward.
TECH IPO LANDSCAPE IN 2017
With Snap Inc. going public, the stage was set for the year’s tech IPO landscape. The less than favourable performance of the year’s first tech company listing did not deter investors and companies looking to go public. So far, tech IPO activity has been consistent, but have not reached the flourishing levels of 2014 and 2015. Based on the first half of 2017, tech IPO activity has not deviated much from last year. The number of IPOs from tech and life sciences companies for the first half of this year is similar to 2016.
Image from Fenwick & West
In contrast to the lacklustre performance of Snap’s shares post-IPO, the subsequent IPOs of 2017 have performed relatively well. Here are some of the tech companies that made successful IPO exits this year.
The software company listed in March and shares have been on an upward trend since. They’ve recently unveiled their Q2 earnings which boasted better than expected figures.
The data analytics company listed on the New York Stock Exchange on 24 March 2017, hitting a high of US$23.14 in mid-July.
The business listing company’s IPO was highly anticipated. The official listing on the NYSE in mid-April 2017 saw the company achieve its highest valuation thus far, placing it well in the ranks of the unicorn club.
Touted as the Amazon of real estate, Redfin’s recent IPO in the end of July saw the company’s share prices surged to above 44% on its first trading day.
MORE TECH IPOS TO COME
The IPO landscape still bears promise with many big names in the pipeline for IPOs later this year. Experts are expecting a bump in tech IPO activity in September and October. Based on the overall positive performance of this year’s new listings, we can expect investor confidence to improve. 2017 may turn out to be the stellar comeback of tech IPOs that everyone has been expecting.
On the flipside, M&A activity for tech startups has slowed down. It seems that while 2016 was the year of M&A exits, 2017 is shaping up to be the year for stellar IPO exits.