Global technology IPO Review: Full-year and Q4 2016

Global tech IPOs in 2016 dropped to their lowest level in the decade amidst macroeconomic and geopolitical turmoil, but a stream of high-profile companies in the pipeline, will likely create a resurgence in 2017*

The year with the fewest tech IPOs in the decade

As measured by numbers of IPOs and total proceeds, 2016 was the slowest year of the decade for global tech IPOs, beating 2013 for this dubious distinction. It also matched the previous low for average proceeds, US$165 million, in 2010. IPOs declined 42% in volume and 68% in total proceeds from 2015 to 2016.

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Number of offerings and proceeds declined for all regions except Europe (excluding UK)

Europe, excluding the UK, was the best performing region in 2016, registering 10 IPOs with total proceeds of US$3.7 billion, a 16% increase over 2015.

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Tech IPO activity in Europe remained brisk in 2016 despite challenges in other markets

Tech companies from eight European countries went public in 2016, including the largest tech IPO of the year from Denmark.

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Lack of big-ticket IPOs pushed average proceeds down to a seven-year low

It was not a year for high-flying tech IPOs, with only two US$1 billion-plus offerings. This reduced average proceeds to a level not seen since 2010.

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Q4 highlights

Q4 2016 was one of the slowest quarters on record with just nine tech IPOs raising US$1.1 billion. The number of tech IPOs declined by 55% sequentially from 20 IPOs in Q3. Proceeds declined 79% from US$5.4 billion in Q3.

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Compared to the first three quarters of the year, geographic distribution was low with only five countries participating in Q4. Proceeds were also down. The US had the most – five IPOs – with total proceeds of US$480 million, but the largest IPO of Q4 was Trivago NV, of Germany, which raised US$287 million.

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The US had five tech IPOs with average proceeds of only US$96 million. Proceeds were in line with the prior three quarters, but were disappointing due to the overall uncertainty of the impending  presidential election.

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China had one IPO raising US$193 million in Q4 2016, however, the number of small sized IPOs, whose issue size is below US$ 40 million, is increasing. With the move in November 2016 by the China Securities Regulatory Commission (CSRC) to speed up the approval of IPOs, it is expected there will be a higher number of tech IPOs approved and listed in 2017.

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The participation of Asian countries other than China decreased significantly in Q4. One tech IPO outside China was listed by an Australian company, with proceeds of US$111 million.

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*Issue size greater than US$40 million (includes overallotment) and based on trade date

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Wilson Chow
Global and China/Hong Kong TMT Leader
Tel: +[86] (755) 8261 8886
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Jianbin Gao
China TMT Leader and Private Equity Group Central China Leader
Tel: +[86] (21) 2323 3362
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