Global Technology
IPO Review
Q1 2017
Global Technology IPO Review Q1 2017Led by two Unicorns, global tech IPO market starts on an
optimistic note in Q1 2017
Raman Chitkara
Partner and Global Technology
Industry Leader
PricewaterhouseCoopers LLP
raman.chitkara@us.pwc
After a challenging 2016 for technology initial public offerings (IPOs), 2017 is off to a good start in the first quarter and that bodes well for
the rest of the year. Welcome to the Q1 2017 issue of PwC’s Global Technology IPO Review. With 18 technology companies listing in the
first quarter of 2017, total proceeds reached US$5.8 billion, the highest in the last five consecutive quarters. The environment for
technology IPOs was positive with two Unicorns—Snap Inc and MuleSoft Inc—listing in Q1 and many more tech Unicorns on the sidelines
waiting to enter the market during the year. Snap, with US$3.9 billion proceeds, was the biggest IPO since the US$21.8 billion listing of
Alibaba in Q3 2014.
Geographically, China showed resurgence, following a slow last quarter of 2016, with 12 tech IPOs raising US$1.2 billion in Q1 2017. A
stronger political and economic environment led China’s stock market regulators to facilitate more homegrown tech companies listing on
the Chinese exchanges. Apart from China, the technology IPO activity was limited to four IPOs from the US and two IPOs from Japan. The
UK and Europe shied away from the technology IPO market, with uncertainty over Brexit and ongoing elections in Germany, France, the
Netherlands and Norway likely to be playing a part. However, Europe is building up a healthy pipeline of technology IPOs and is expected
to emerge stronger following the elections.
The Internet Software & Services subsector led the technology IPO market in Q1. Semiconductors and Communications Equipment also
witnessed strong growth owing to significant participation from Chinese companies.
Overall, the outlook for the world economy is improving in 2017 after several years of lukewarm performance. There are signs of strong
activity in some pockets of both mature and emerging markets. The technology IPO market will likely cash in on this positive sentiment
through the remainder of 2017. However, plausible headwinds like political uncertainty in election-bound Europe, perceived
protectionism from the US and the rise of US Federal Reserve interest rates may slow the first quarter’s positive pace.
Sincerely,
*Issue size greater than US$40
million (includes overallotment)
and based on trade date;
See Methodology
Table of contents
1.
Q1 2017 global tech IPO summary 3
A resurgence of tech IPOs after a soft 2016 ........... 3
Q1 average proceeds for tech IPOs were higher than in 2014 and 2015 . 4
Snap among the top five tech IPOs in the lastseven years .......... 5
Tech IPOs in Q1 2017 were restricted to the USand APAC ......... 6
Macro-economic and geo-political concerns weigh heavily on Europe andthe UK .......7
Absence of cross-border IPOs reflected favorable market in China ........ 8
Global tech IPOs rode high on Internet Software &Services subsector . 9
China ... 10
United States ... 11
All other geographies ... 12
Europe .. 13
2.
Stock exchange distribution 14
Tech IPOs were concentrated in five stock exchanges ..... 14
3.
Subsector distribution – Q1 2017 15
4.
Distribution of VC and non-VC backed IPOs 16
Q1 2017 tech IPOs – Offering details ........ 17
5.
Key financials – Q1 2017 19
6.
Q1 2017 Technology IPO listings – Valuation metrics 24
7.
Top three subsectors in Q1 2017 26
Internet Software& Services ...... 26
Communications Equipment . 33
Semiconductors .......... 40
8.
Methodology 47
9.
For more information 48
Global Technology IPO Review Q1 2017Q1 2017 global tech IPO summary
A resurgence of tech IPOs
after a soft 2016
Following a disappointing 2016, Q1 2017 saw a flurry of
activity in technology IPOs. Both deal volume and deal
value increased significantly during the first three months
of 2017 as 18 technology IPOs raised a total of US$5.8
billion. This was a phenomenal 234% sequential growth
and 655% year-on-year growth in total proceeds, along with
an 80% increase in the number of listings, sequentially and
year on year.
In the US, growing investor confidence after the elections
and the lack of late-stage private funding helped the IPO
market bounce back. It registered a total of US$4.5 billion
proceeds aided greatly by two Unicorn IPOs, Snap
and MuleSoft.
Chinese technology companies performed well as China
registered 12 technology IPOs with total proceeds of US$1.2
billion.
Figure 1: Global tech IPOs Q1 2016- Q1 2017
Source: S&P Capital IQ with analysis by PwC
$769
$1,480
$5,382
$1,742
$5,81314
2018
-1020
25
Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
No
. o
f IP
Os
US
$ m
illi
on
s
Total proceeds (US$mn)Total number of IPOs
Overall, the outlook for the world economy is improving in 2017 … the technology IPO
market will likely cash in on this positive sentiment through the remainder of 2017.”
Raman Chitkara
Global Technology Industry Leader
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