Global tech IPOs close 2015 on record highs

Overall, 2015 was the second-best year for global technology IPOs in five years, with 92 IPOs that raised $27.1 billion in proceeds, according to PwC’s Global Technology IPO Review.

This marked a decline of 22% in terms of listings and 47% in proceeds compared with 2014. However, total proceeds declined just 8% if we exclude the blockbuster 2014 Alibaba IPO.

Global technology IPO activity was lower in 2015 than 2014 primarily due to two factors: uncertainties about US Federal Reserve and European monetary policies and uncertainty over the Chinese economy. Concerns in these key areas led to weak and volatile capital markets around the globe.

Additionally, a large unresolved disparity between public and private market valuations tempered technology IPO activity.

The fourth quarter—the strongest period of the year—was instrumental in driving 2015 proceeds to their height after a relatively modest previous three quarters.

The fourth quarter had reported average proceeds of $490.2 million, bolstered by the two largest tech IPOs of the year: Worldpay Group Plc ($3.8 billion on the London Stock Exchange) and First Data Corp. ($2.6 billion on the New York Stock Exchange).

Though the number of listings in the fourth quarter declined by 34% year on year, total proceeds increased by 45%.

Internet Software & Services was far and away the leading tech IPO subsector in 2015 with 40 IPOs and $15.9 billion proceeds. It contributed 59% of the total proceeds raised during the year, 43% of the listings, and boasted four of the five 2015 $1 billion-plus IPOs. Of the 40 IPOs, 20 were listed on US exchanges and five on the London Stock Exchange (LSE).

“Despite continued market volatility and global economic concerns, the accelerating pace of technological change across all industries helped to buoy global tech IPO activity in the fourth quarter and led to the second best year since 2010,” said Raman Chitkara, PwC Global Technology Industry Leader. “While we can expect to see fewer technology IPOs until volatility subsides, it’s too early to say whether 2016 will mean a pullback across the technology sector as a whole.”

IPO activity gained pace in the fourth quarter due to the return of both US and China tech IPOs, which were virtually absent in the third quarter. The freeze on China IPOs put in place in the third quarter by the Chinese Securities and Regulatory Commission was lifted in November, while volatile US market activity in the third quarter led to companies delaying their listings to the fourth quarter or beyond.