Mergers and Acquisitions Dominate Liquidity
2016 was the slowest year for US initial public offerings (IPOs) since
the 2009 financial crisis. A total of 106 US IPOs raised $123.7 billion – down
approximately 30% from 2015 totals.
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This trend is fueled by an increase in
mergers and acquisitions of venture-funded companies. In particular, cash-
rich and technology hungry strategic/corporate investors are acquiring venture-
funded companies. Corporate giants such as Qualcomm, Microsoft, Oracle,
Samsung and Tencent are spending significant amounts of capital, often at
favorable valuations, to buy up smaller tech companies and gain access to the
newest and most disruptive technologies in cloud computing, IoT, smart mobility,
social networking, big data analytics and more. 2016 resulted in $612.9 billion in
global tech deals, making it the second-best year of the decade for acquisitions
– second in pace only to a record-setting 2015 which saw $691.4 billion in tech
transactions globally.
2017 is already shaping up to be a record-breaking year for exits as
investors continue to realize liquidity from pent-up gains that have been accruing,
but illiquid for several years. There have been 83 IPOs on US markets year-
to-date for 2017, which is up 73% from the same period a last year. Total IPO
proceeds for the same period in 2017 is $21 billion, up 159% year-over-year.
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Six
'Unicorns' (venture-funded companies valued at $1 billion or higher) completed
IPOs through Q3 2017: Snap, MuleSoft, Okta, Cloudera, Delivery Hero and Blue
Apron. In comparison, there were five "Unicorn" IPOs in all of 2016.
Geographically, China continues to show robust growth in the technology
IPO market with 39 companies raising a total of $5.5 billion so far this year.
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6
"Learn more about the 2016 IPOs on Accompany." Accompany, 19 Sept. 2017,
.
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Roof, Katie. "The 11 biggest tech acquisitions of 2016." TechCrunch, TechCrunch, 3 Jan. 2017,
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"Global Technology IPO Review Q3 2017." PWC, October 2017, page 9.
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