Global Technology
IPO Review
Full-year and Q4 2016
Global Technology IPO Review Full-year and Q4 2016 1
Global tech IPOs in 2016 dropped to their lowest level in the decade
amidst macroeconomic and geopolitical turmoil, but a stream of
high-profile companies in the pipeline will likely create a
resurgence in 2017*
Raman Chitkara
Partner and Global Technology
Industry Leader
PricewaterhouseCoopers LLP
raman.chitkara@us.pwc
On the heels of two strong years, 2016 ended with the fewest global technology IPOs of any year in the decade, with only 53 tech
companies completing initial public offerings for total proceeds of US$8.7 billion. That’s a 42% decline in volume and a 68% decline in
proceeds from 2015. With 20 tech IPOs, Q3 was the best period of the year, but Q4 was the worst, with just nine tech IPOs. The market
rally following the US elections bodes well for a healthier global tech IPO market in 2017.
The year started slowly with only 24 IPOs and US$2.2 billion in proceeds in the first half of 2016, a result of the steep stock market sell-off
in January that froze out potential IPO companies. Volatility and uncertainty closed the US IPO window, and China posted just three tech
IPOs in the first quarter. The UK, historically one of the leading markets in Europe, saw no tech IPOs in 2016, a result of uncertainty over
the Brexit election that grew into concern about executing on the outcome. Although the UK was absent, Europe posted reasonable results
with 10 IPOs from eight countries, including three of the largest tech IPOs of the year. They included the largest, Net A/S, a digital
payments company in Denmark, at US$2.4 billion.
Given uncertainty associated with the US presidential election, most companies chose to remain on the sidelines in the fourth quarter.
Overall, tech IPOs rebounded in the second half of 2016, with an almost three-fold jump in proceeds. Even so, average proceeds only
equaled those in 2010 (US$165 million), the prior low for the decade. Big-ticket IPOs that were common in 2014 and 2015 were all but
non-existent in 2016.
With 80% of tech companies that debuted in 2014 or 2015 typically trading below their first-day closing prices during most of 2016,
valuations became a key concern.1 The combination of uncertain market conditions, high private valuations and ample cash caused many
companies to wait until public markets offer a more favorable environment, like we’re starting to see in early 2017.
Looking ahead, optimism for higher economic growth post US elections has spurred a market rally. With investors keeping a sharp focus
on profitability, not simply revenue growth, we expect the companies going public will likely have better earnings quality and less
aggressive valuations than in recent years. This should help to support and accelerate tech IPOs in 2017.
Sincerely,
1. https://bdo.nz/getattachment/Insights/Advisory/Newsletters/2016-Technology-Risk-Factor-Report/2016-Technology-
RiskFactor-Report-Brochure-WEB.pdf.aspxlang=en-NZ
*Issue size greater than US$40
million (includes overallotment)
and based on trade date;
See Methodology
Table of contents
1. Full-year 2016 global tech IPO summary 3
2. A close look at full-year 2016 technology IPOs 12
Geographic IPO trends – Full-year 2016 .. 12
Europe and the UK ...... 12
China .... 13
United States ... 14
Full-year 2016 tech IPOs – Offering details ... 15
3. Q4 2016 Global tech IPO summary 19
Q4 2016 Top 5 technology listings20
Q4 2016 Geographic tech IPO trends ........ 21
United States .. 22
China ... 24
Europe (excluding UK) ........... 25
UK ....... 26
Asia (Excluding China) ........... 27
Average proceeds .. 28
Age of company ..... 29
4. Q4 2016 Stock exchange distribution 30
5. Q4 2016 Subsector distribution 31
6. Key financials—Q4 2016 33
Q4 2016 Technology IPO listings: Valuation metric ....... 38
Top three subsectors in Q4 2016 ... 40
7. Methodology 61
8. For more information 62
Global Technology IPO Review Full-year and Q4 2016 3
Full-year 2016 global tech IPO summary
The year with the fewest tech IPOs in
the decade
As measured by numbers of IPOs and total proceeds, 2016
was the slowest year of the decade for global tech IPOs,
beating 2013 for this dubious distinction. It also matched
the previous low for average proceeds, US$165 million, in
2010. IPOs declined 42% in volume and 68% in total
proceeds from 2015 to 2016.
Figure 1: Global tech IPOs 2010-2016
Source: S&P Capital IQ with analysis by PwC
$17,952$15,857
$23,155
$11,446
$51,193
$27,103
$8,745
109
87 69
64
118
92
53
-40
60
80
100
120
140
2010201120122013201420152016
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
No
. o
f IP
Os
US
$ m
illi
on
s
Total proceeds (US$mn)Total number of IPOs
“Several factors suggest the 2017 global tech IPO market will be much better: the postelection stock market rally,
the promise of US tax reform, general economic conditions, cyclicality of the tech IPO market and pent-up demand
for public offerings.”
Raman Chitkara
Global Technology Industry Leader
Global Technology IPO Review Full-year and Q4 2016 4
After a slow start, global tech IPOs
bounced back in the second half
of 2016
The global technology IPO market gained momentum in Q3
after a slow first half. Twenty-nine technology IPOs were
listed in the second half versus 24 in the first half. The
second-half resurgence occurred in Q3 with 20 IPOS, as
most tech companies shied away from the IPO market
in Q4.
Only two Unicorns completed their IPOs in 2016, both
in Q3.
Figure 2: 2010-2016 1st half vs 2nd half tech IPOs
Source: S&P Capital IQ with analysis by PwC
$8,699$9,253$8,710$7,147
$20,817
$2,338
$4,588
$6,858
$18,955
$32,237
$12,225
$14,878
$2,250
$6,495
55 54
53
3450
27
37
66
52
59
33
24
29
-20
30
40
50
60
70
1st Half
2010
2nd
Half
2010
1st Half
2011
2nd
Half
2011
1st Half
2012
2nd
Half
2012
1st Half
2013
2nd
Half
2013
1st Half
2014
2nd
Half
2014
1st Half
2015
2nd
Half
2015
1st Half
2016
2nd
Half
2016
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Total proceeds (US$mn)Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
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