VENTURE CAPITAL IPO REPORT - FIRST HALF 2015
During the first half of
calendar year 2015, 39 venture capital-backed North American technology
companies went public, raising a total of $4.33 billion in gross offering
proceeds. This result represented a 3% sequential increase when compared to the
second half of 2014, which tallied $4.2 billion in gross proceeds.
Life Science companies continue
to dominate IPO market activity. 11 Biotechnology and 9 Pharmaceutical
companies secured a combined total of $1.37 billion during the period,
representing 32% of all IPO proceeds. Six Medical Devices companies went
public, raising $460 million.
Four Software companies raised
$231 million and six companies in the industries of IT, Internet, Security and
Storage collected $1.26 billion in proceeds. Six companies in the remaining
industries of Digital Media, Electronics, Ecommerce, Security and Storage
raised a combined $1.27 billion.
The largest IPO of the half year period was
that of electronics manufacturer FitBit, which raised $732 million.
With respect to pricing, 12 of
the 39 IPOs priced above their expected range. 19 companies priced within the
expected original or revised range and the remaining 8 companies priced below
the original range sought. This represents an improvement over the previous
half-year period, with more IPOs pricing above or within their expected range
than in the previous period.
The overall stock market
exhibited a generally rising trend during this period, so greater visibility
into market demand may have been the result. The half-year period ended on a
strong note for the Life Sciences industries, with the last month of the period
seeing six Bio/Pharma/Med Device offerings out of twelve going public in June.
However, as of 7.31.2015, 16 of the 39 IPO share prices were lower than their
initial flotation price, reflecting a middling general stock market for
There were only two Internet
company IPOs during the first half of 2014, continuing a recent trend of sparse
Internet hosting provider GoDaddy
(NYSE: GDDY) floated its IPO, raising $440 million in gross proceeds.
Headquartered in Scottsdale, Arizona, the company provides a variety of
Internet infrastructure services, such as domain name purchasing, website
hosting and related services. GoDaddy had been backed by a syndicate of private
equity and venture capital firms, including KKR, Silver Lake and Technology
Crossover Ventures. The original pricing range was $17 - $19 and the shares
priced just above the range at $20 each. The share price has since done well.
As of 7.31.2015, the GDDY closed at $28.44 per share, 42% higher than the IPO
SOFTWARE AND IT
There were five IPOs during the
second half of the year for the Software and IT industries, with gross proceeds
totaling $513 million.
In the largest Software IPO
during the six-month period, San Luis Obispo, California-based MindBody
(NASDAQ: MB) raised $100.8 million in gross proceeds at a price of $14 per
share, within the original range of $13 - $15.
MindBody provides point of sale (POS) software for small businesses that
also enables online booking, marketing and mobile support. Company shares on
the day of the flotation dropped significantly to close down 17%. Since the
IPO, its shares have fared worse, dropping further to $9.80.
Healthcare IT company Evolent Health
(NYSE: EVH) floated its offering and raised $195.5 million for its software and
services that support the migration of legacy healthcare systems towards
“value-based care and population health management”. Evolent priced its
offering at $17 per share, above the expected range of $14 - $16 and the stock
price has since risen by 25%, to $21.33 as of 7.31.2015.
There were eleven biotechnology IPOs
during the first half of 2015 compared to thirteen in the previous six month period,
the most activity of any industry. Gross proceeds totaled $859 million, with
five of the eleven IPOs pricing above their original range.
Philadelphia-based Spark Therapeutics
(NASDAQ: ONCE) raised $161 million at $23 per share, well above its estimated
range of $19 - $21. Spark is currently developing its lead candidate that
promises to treat retinal dystrophies that cause rare forms of blindness. The
company was backed by a syndicate of venture capital firms and late stage
investors including T. Rowe Price. Spark had previously raised
$72.8 million in its Series B round of financing as recently as May of 2014, so
its path to IPO was extremely fast. Its stock price since the IPO has
skyrocketed 167% to close at $61.44 as of 07.31.2015.
Nine venture capital-backed
Pharmaceutical companies went public in the first half of 2015, raising $413
million in aggregate gross proceeds, versus four companies that went public in
the second half of 2014.
Pharmaceutical IPOs were not
characterized by a single large IPO event.
Fremont, California-based Zosano Pharma
(NASDAQ: ZSAN) was typical with its rather modest raise of $49.5 million in
gross proceeds at $11 per share, within its original price range expectation of
$10 - $12. Zosano is commercializing a proprietary transdermal microneedle
patch system that promises to deliver drug formulations through the skin. It is
in trials for multiple applications of the system and has already inked a
strategic partnership and license agreement with Eli Lilly and Company.
Six venture capital-backed
Medical Device companies went public versus five IPOs in the previous 6 month
Glaucoma treatment device maker Glaukos
(NYSE: GKOS) of Laguna Hills, California, raised $108 million in its IPO in
November, 2014. Glaukos has created what it calls the iStent, a micro-bypass
stent that is used in conjunction with cataract surgery to reduce intraocular
pressure. The company priced its shares at $18, well above its original
expected range of $13 - $15 per share. The stock has since increased 77% since
its IPO, to close at $31.79 as of 7.31.2015.
There were six IPOs covering the
remaining technology sectors of Digital Media, Electronics, Ecommerce, Security
and Storage. Aggregate gross proceeds totaled $1.27 billion.
San Francisco-based FitBit
(NYSE: FIT) floated its IPO, raising $732 million in gross proceeds. The fitness electronic maker’s IPO went out
above its estimated range, pricing at $20 per share versus an original expected
range of $17 - $19 per share. FitBit
makes a line of popular wearable fitness tracking devices for consumers. The
company was backed by a large syndicate of venture capital firms and strategic
investors. Since the IPO, the company’s stock has more than doubled, increasing
by 139%, to close at $47.75 per share as of 7.31.2015.
Ecommerce technology company Shopify
(NYSE: SHOP) based in Ottawa, Canada raised $130.9 million in gross proceeds
for its IPO that priced shares above its expected range of $14 - $16 per share.
Shopify provides a cloud-based e-commerce platform for small and medium-size
businesses to get a clearer picture of their customer activity across various
sales channels. The company was backed by a combination of Canadian and US
based venture capital firms. Shopify’s stock price has shot up since the IPO,
closing at $37.39 on 7.31.2015, representing an increase of 120% over the IPO
- Venture Capital IPOs – 1H 2015
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