The IPO market ended last year with a bang and started this one with a whimper.
A total of nine venture-backed companies went public on U.S. exchanges in December, raising just under $1.3 billion, according to Thomson Reuters (publisher of VCJ). That made it one of the stronger months in a year of improving fortunes for the VC-funded IPO market, which posted a respectable rebound in 2010 after a marked slowdown in the prior two years.
Yet the momentum didn’t carry straightaway into the New Year. During the first three weeks of January, there were no IPOs of venture-backed companies. Over the same period, just two VC-funded companies registered to go public: Wi-Fi provider Boingo Wireless and China-based power management semiconductor products maker BCD Semiconductor Manufacturing.
Boingo Wireless filed to raise up to $75 million in an IPO on Nasdaq, under the ticker symbol WIFI. BCD Semiconductor Manufacturing filed to raise $69 million.
Given that the start of the year is commonly a slow period for new offering activity, however, IPO market watchers saw considerable potential for a near-term pickup in activity.
“With nearly 120 firms currently in active registration status, 2011 is shaping up to become a busy year for IPOs,” wrote analysts at Renaissance Capital.
In addition to companies already in registration, Renaissance says excitement is also building around still-private companies in the social networking space, such as Facebook, Groupon, LinkedIn and Zynga Game Network, which have been exploring the possibility of going public.
Judging from recent market activity, however, the most likely social networking giant to go public on a U.S. exchange could be located on the opposite side of the Pacific Ocean from Silicon Valley.
Certainly that was the case looking at December’s IPO lineup. Continuing a trend of the past several months, China-based companies dominated the IPO pipeline, with five new offerings during the course of the month. The new market entrants, which included online retailer E-commerce China Dangdang(NYSE: DANG), movie distributor Beijing Polybona Film Distribution, mobile phone application developer SKY-MOBI (Nasdaq: MOBI), video sharing site Youku.com (NYSE: YOKU) and IT servicers provider iSoftStone Information Technology (NYSE: ISS), collectively raised just over $770 million.
Of those, E-Commerce China Dangdang orchestrated the largest offering, raising $272 million in its Dec. 8 debut. Backers include Tiger Global (pre-IPO stake 24%), DCM (9%) and IDG Technology Venture Investment (7%).
Just behind the e-commerce company was Youku.com, the “YouTube of China,” which raised $203 million in its IPO the same day. Its venture investors include Brookside Capital Partners (17% stake), Sutter Hill Funds (12%), Maverick Funds (11%) and Farallon Funds (11%).
U.S.-based companies also managed to sell some IPO shares in December. A total of four domestic, venture-backed companies made it out over the course of the month, including commercial fleet card processor FleetCor Technologies, foreign currency trading site GAIN Capital, network service provider RigNet and LED-based light developer SemiLEDs. The largest offering was from Norcross, Georgia-based FleetCor Technologies (NYSE: FLT),which raised $292 million in its Dec. 15 IPO.
As those companies made it out, new ones filed to take their place on the IPO waiting list. A total of four venture-backed companies filed to go public on U.S. exchanges in December, including:
Responsys, a San Bruno, Calif.-based developer of an online direct marketing platform, is looking to raise $60 million in an IPO. Shareholders include Foundation Capital (20%), Sigma Partners (19%), Accel Partners (17%), Redpoint Ventures (11%) and The Entrepreneurs’ Fund (8.4%). The company raised $57 million from venture investors between 1998 and 2003, according to Thomson Reuters.
Supernus Pharmaceuticals, a Rockville, Md.-based . developer of treatments for central nervous system diseases, filed to raise $100 million. Principal shareholders include New Enterprise Associates (45%), OrbiMed Private Investments (18%), Abingworth Bioventures (18%) and Shire LLC (7%).
Sagent Pharmaceuticals, a Schaumburg, Ill.-based provider of injectable therapies, is seeking to raise $100 million. Vivo Ventures owns a 43% stake in the company.
Fluidigm, a South San Francisco, Calif.-based of microfluidic systems for the agriculture and biotechnology industries, is seeking to raise $86 million through an offering on Nasdaq. Shareholders include Alloy Ventures (5%), EuclidSR Partners (7%), Versant Ventures (8%) and the Singapore government (14%). The company previously raised $216 million in venture funding between 1999 and 2009.