The Tech Sector Cools Off

Last December, we were wrapping up 2014, a year that saw a lot of good news.

We reported on a record-breaking twelve months in the new issuance market, discussed the healthcare sector’s 100th IPO, and looked back at Alibaba’s all-time biggest debut.

2015 was a little less exciting, even for Tech, a sector that always piques public interest.

The new issuance market had something of a rocky year, thanks to turbulent market conditions, the lack of a stand-out, blockbuster debut, and a summer swoon that extended into fall. So instead of touting Healthcare’s record-breaking numbers, we’re talking about how 2015 marks the first time since 2011 that proceeds and deal count have dropped from the prior year.

While average proceeds raised from Tech IPOs grew from $201.5M in 2014 to $304.6M in 2015, deal count dropped from 43 last year to 23 YTD this year. This marks the first since in last 5 years that the number of Tech IPOs dropped from the prior year, as the sector has seen an increase in the number of tech IPOs from the previous year since 2011.

The 2015 average figure marks the second largest in the last 5 years for the sector behind only 2012’s average of $596.6M, which was bolstered by Facebook’s massive $16.0B debut. Among the Tech debuts in 2015, First Data Corp. and GoDaddy Inc. took the top spots in terms of proceeds with $2.8B and $520.0M, respectively, a far cry from Facebook and Twitter.

It’s not all doom and gloom. While deal count has dropped off considerably, 2015’s average proceeds for the sector have remained 2nd strongest since 2011. Tech will just need to start a new streak in January.