The global technology IPO market continued to exhibit its strength in the second quarter, with 36 IPOs and total proceeds of US$6.2 billion, according to PwC's Global Technology IPO Review.
The number of offerings marked a 57% increase over the 23 IPOs in the first quarter of 2015. Looking at second-quarter performance back to 2010, only the second quarter of 2014 posted more technology IPOs than 2015 with 40.
But while we saw a high number of second-quarter offerings, proceeds advanced only 2% from the first quarter due to the lack of billion-dollar offerings. Compared with the second quarter of 2014, $6.2 billion in proceeds marked a 49% decline.
"We're seeing greater availability of late-stage private funding, which means many successful startups feel less pressure to go public," said Raman Chitkara, PwC Global Technology Industry Leader. "Private funding is now coming from hedge funds, mutual funds, sovereign wealth funds and corporate venture arms—not just venture capital funds."
Exemplifying this trend, $2.8 billion raised from 11 second-quarter US technology IPOs was significantly less than the $4.3 billion raised from private funding rounds by 14 "unicorns"—technology companies with billion-dollar valuations. Globally in the second quarter, 21 unicorns raised $7.8 billion, compared with the $6.2 billion across 36 IPOs.
Global participation remained strong with IPOs from 11 countries
The United States led the way in proceeds, with $2.8 billion across 11 offerings, including the largest technology IPO of the quarter, which raised $841 million. Europe's five technology IPOs during the quarter included three of the top 10 offerings, which contributed to the region's second-highest total proceeds of US$1.3 billion.
China had the highest number of offerings (14), but posted just $1 billion in total proceeds, marking the first time in the past seven quarters no Chinese technology company cracked the top 10. The remaining six IPOs across five other countries raised $1.1 billion in total proceeds.
"The United States bounced back strongly with 11 IPOs raising US$2.8 billion, more than doubling the comparable numbers from the previous quarter, and Europe continues to deliver consistent technology IPO activity," said Chitkara.
Chinese exchanges had a strong presence in the second quarter, with 12 of the 14 Chinese technology IPOs listed in China and the remaining two listed on NASDAQ.
Internet Software & Services remained the top subsector in the second quarter, with 16 IPOs, or 44% of the total global technology offerings. Continued innovation across mobile commerce, social networks and software-defined value is driving investor interest and activity in this subsector.
Compared with the previous quarter, Internet Software & Services had a 100% increase in the number of IPOs. However, the $2.3 billion in total proceeds represented a 32% dip from the first three months of the year.