Firms & Funds

IPO Aftermarket: Market is nearly frozen as only VC-backed biotech companies are trickling out

18 March 2016

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After there were zero VC-backed IPOs in January, they could only go up.

And they did in February, as four venture-backed IPOs debuted on U.S. exchanges in the month. All four were biotech companies.

Only one new company, Syndax Pharmaceuticals, has launched an IPO through mid-March. And with just five IPOs in the first two-and-a-half months, Q1 could rank as the lowest quarter for VC-backed IPOs since the third quarter of 2011 when five venture-backed companies went public, according to a VCJ analysis of the market data.

Eric Jensen, an IPO attorney for Cooley LLP, recently told Reuters that his firm has “a pretty significant pipeline of deals,” which includes nearly three dozen companies that have filed with regulators for IPOs, either confidentially or publicly. But he said plans by the largest tech companies in that queue, which are sporting $1 billion-plus valuations, “are all stalled out” as a result of current market conditions.

Thank goodness for biotech. In addition to the five biotech stocks that have gone public in early 2016, at least three venture-backed biotech or healthcare companies are in registration, according to a VCJ analysis: CareKinesis, Clearside Biomedical and Corvus Pharmaceuticals.

Separately, tech companies that are rumored to be eyeing IPOs in 2016 include such brand names as Airbnb, Dropbox, InsideSales.com, MuleSoft and Nutanix.