On the Bleeding Edge: Wait until next year for those venture-backed IPOs

Well, so much for momentum.

Zero U.S.-based VC-backed companies went public on the NYSE and Nasdaq exchanges in November.

That’s not too surprising. The market for new issues typically slows down at the calendar year’s end. In 2015, five venture-backed companies debuted on U.S. exchanges in November and only one IPO’d in December, according to a VCJ analysis of data from Thomson Reuters.

So far this year, 37 VC-backed companies have combined to raise nearly $3.2 billion in proceeds, meaning the market is on pace to make 2016 the worst year for IPOs since the Great Recession of 2009, when 12 IPOs raised $1.6 billion, according to VCJ’s analysis.

But momentum for tech IPOs had been gaining steam recently, as we saw eight public offerings in October, including five tech comapnies.

Since late June when the unicorn Twilio went public, followed three months later by the unicorn Nutanix, many stock-market watchers have said that 2017 will be the year to watch for tech IPOs, particularly for these companies with $1-billion-plus valuations.

Those who believe in the power of IPOs were emboldened when Snap, the parent of Snapchat, in November filed confidential paperwork with the Securities and Exchange Commission for a public offering that could value the company at $20 billion to $25 billion. An IPO is anticipated as early as March.

Some even say that the number of 2017 IPOs could rival 2014, when 118 companies, including Lending Club and Hubspot, went public and raised nearly $14.4 billion.

This past week, VCJ Senior Editor Mark Boslet explored the IPO market and filed three stories on the topic.

IPOs spring back to life

Entrepreneurs say ho-hum to IPOs

For VC-backed IPOs, what’s hot and what’s not?

I recently talked with Jane Leung, managing director and chief investment officer at Scenic Advisement. Granted, the firm is focused on the secondaries market as it helps the liquidity needs of high-growth, late-stage tech companies and their investors.

Asked whether the IPO market will be hitting its stride in 2017, she cautions that it could creep back slowly.

She wrote more on the topic in a Medium post called “2017 May Be Banner Year for IPOs. Or Not.”

Either way, VCJ will be here to cover it all.

Will 2017 be the year we see an increase in IPOs? Please let me know what you think at agoldfisher@buyoutsinsider.com.

Illustration of man weight-lifting dollar sign courtesy of ©iStock/erhui1979