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September 30, 2016

By Domenico Positano

Tech IPOs making a comeback

Global technology IPOs recorded a slow start to the year in 2016, with 1Q volume ($1.4bn via 33 IPOs) the lowest since the financial crisis, and 2016 YTD volume the lowest since 2013. However, the sector has bounced back with $4.3bn priced in September – 42% of total volume in 2016 YTD and the second largest September volume on record.

Activity of 32 deals marks the third most active September on record for the sector, following the tech bubble years of 2000 (49 IPOs, $2.8bn) and 1999 (46 IPOs, $2.5bn).

Second US unicorn of 2016

Nutanix’s $238m upsized IPO priced on September 29, the second US-listed unicorn IPO this YTD after Twilio ($173m) in June. In September, six tech issuers went public on US exchanges ($687m).

17 US-listed tech IPOs have priced so far this year ($3.0bn), the lowest activity since 2009 YTD. However, 16 IPOs (Nutanix starts trading September 30 on the NASDAQ) are currently trading up on average 72% from their offer prices, compared to an average return of 35% across all sectors for US-listed IPOs in 2016. Only three out of the 17 US-listed tech IPOs have priced below range vs seven above range.

Largest global tech IPO YTD

Denmark’s PE-backed Nets priced a $2.4bn IPO on September 23, the largest tech IPO globally in 2016. It is also the second $1bn+ priced this year, after Japan’s LINE ($1.3bn), a dual listing on the NYSE and Tokyo in July and the largest US-listed IPO so far this year. The average deal size for global tech IPOs is $71m in 2016, compared to $101m in 2015 YTD and $168m over the last five years.

First EMEA unicorn of 2016

Also this month, Takeaway.com priced a $368m IPO on September 29, the first EMEA unicorn IPO to price this year.