This year was long expected to break records in terms of IPO activity and six months into it we thought it prudent to check just how accurate those expectations were. To normalize mid-year results, we looked at average monthly statistics over the past decade, both by volume and proceeds – here’s what we found.
While deal volume has not matched the highs of 2012, 2013 and 2014, average proceeds from IPOs have far outpaced any time over the past ten years. The peak in 2012 experienced an average of just over $1.6 billion in IPO proceeds a month while 2019 to date has averaged over $2.4 billion. More impressive still, total IPO proceeds YTD are nearing $15 billion. This pace is on track to surpass 2012’s $19.7 billion raised– all of this activity despite a frozen IPO market in January due to the 35-day government shutdown. Of course, the second half of the year may not match the barrage we saw in the first half, yet there are notable companies, including The We Company (WeWork) and Postmates, that have filed confidentially.
To drive the point home further, these formally private tech companies have generated exits that have benefited their employee shareholders, private investors, and visionary founders vis-a-vis liquidity. Private growth, as an asset class, appears to be steadily maturing for those stakeholders. We, of course, must mention the fact that on a price per share basis certain companies, like Pinterest, saw down-round IPOs. Nonetheless, the innovation economy has so far cultivated a number of notable, multi-billion dollar exits in 2019.
Beyond the headline-grabbing activity of companies jumping into the public market, the performance of those companies from IPO pricing has generally tracked the bull market performance of 2019 to date. Whether attributable to the broad market rebound after the near-bear end to 2018 or otherwise, these companies have generally seen capital appreciation year-to-date. Collectively, they are up an average and median of 77 and 35 percent, respectively. Of course, these results are prone to change at any moment, but the story thus far in 2019 has been largely positive. We’ll eagerly be tracking the second half of the year and will report back on our findings.
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