Venture-backed IPOs Rebound from Q2 Slump –

NEW YORK – Following a second quarter dip in the venture-backed initial public offering market, the industry pipeline received a bit of decongestant in the third quarter as 81 deals were successfully executed.

In all, venture-backed companies raised over $7.57 billion in the third quarter through public exits, according to data from Venture Economics and the National Venture Capital Association. While that figure falls short of the $8.5 billion raised in the first quarter, it still represents approximately 55% of all IPOs offered between July and September.

Leading the way was Corvis Corp., an optical networking firm that raised just over $1.13 billion and, at press, was trading at nearly double its $36 per share offering price. Other big venture-backed winners included Equinix, which raised $240 million, Cosine Communications, which raised $236 million and Avici Systems, which netted $217 million.

In terms of sector success stories, public investors flocked to computer software and programming offerings. In all, 16 such deals hit the Street raising a total of just over $1.08 billion. The fiber optics sector actually brought in more cash, but that was due to the Corvis offering, given that it was one of only two fiber optic deals in the third quarter.

Other big sectors included data communications with five deals totaling $650.5 million and pharmaceutical with seven deals bringing in $559.8 million.

Like always, industrial equipment was one of the bigger losers with only $119 million raised from a single offering.

Q3 Venture-backed IPOs Year-by-Year Breakdown

No. of Amt.

Year Deals Raised

1995 46 $2.23B

1996 51 $1.86B

1997 38 $1.43B

1998 20 $1.19B

1999 79 $5.51B

2000 81 $7.57B

Source: Venture Economics

Q3 Venture-backed IPOs Sector Breakdown

No. of Amt.

Year Deals Raised

Wireless Comm. 6 $481.6M

Data Comm. 5 650.0M

Internet Comm. 4 479.0M

Turnkey, Integrated 1 73.2M

Computer, Peripheral 1 45.0M

Computer Services 1 63.0M

Computer Software 16 1,089.0M

Internet Software 2 170.0M

E-commerce/Content 7 470.0M

Semiconductors 6 481.3M

Power Supplies 1 136.0M

Fiber Optics 2 1,234.0M

Scientific Equip. 1 60.0M

Electronics, Other 1 50.0M

Optoelelectronics 1 52.0M

Biotech, Human 6 377.2M

Biotech, Industrial 1 172.8M

Biotech, Equip. 1 69.0M

Biotech, Research 4 352.0M

Medical Therapeutics 4 224.2M

Medical Products 1 31.5M

Pharmaceuticals 7 559.8M

Industrial Equip. 1 119.0M

Finance, Real Estate 1 128.6M

Totals 81 $7.57B

Source: Venture Economics

Venture-backed IPO Totals Year-by-Year

No. of Amt.

Year Deals Raised

1995 206 $8.29B

1996 278 $11.89B

1997 138 $4.95B

1998 78 $3.84B

1999 263 $20.47B

2000 (YTD) 212 $20.38B

Source: Venture Economics