www.pwc.com
Global Technology
IPO Review
Full-year and Q4 2014
Technology Institute
A quarterly look at global
trends in the technology
IPO market
January 2015
Best year of the decade for global technology IPOs*
Welcome to the full-year and fourth quarter 2014 issue of PwC’s Global Technology IPO
Review. The year 2014 was a very exciting year for technology IPOs globally. The IPO
landscape witnessed some unique events:




Largest IPO ever of Alibaba.com raising US$21.8 billion
Highest proceeds of US$51.2 billion being raised in the last ten years and more than
the combined proceeds of the past three years (2011-2013 US$50.5 billion)
Record number of 118 listings
Broad global participation by 19 countries
Even amidst geopolitical challenges in Russia, Ukraine and the Middle East, technology
IPO activity remained unfettered.
Raman Chitkara
Partner and Global Technology
Industry Leader
PricewaterhouseCoopers LLP
raman.chitkara@us.pwc.com
This year also witnessed the comeback of Chinese listings and the re-emergence of Europe
on the technology IPO map. Overall, Chinese technology IPOs dominated the 2014 IPO
scene, surpassing the US with 45 versus 37 listings. However, the US exchanges (NYSE
and NASDAQ) maintained the number one global position with 56 versus 34 listings. In
the US, the NYSE brought 15% more technology companies public than NASDAQ
(30 versus 26).
The Internet Software & Services subsector emerged as the clear favorite, not only in 2014
but also during the entire period of 2011-2014, while Software held the second spot since
2012. This year the Semiconductor subsector also made a comeback with the lifting of the
IPO freeze in China by the China Securities Regulatory Commission (CSRC).
The number of cross-border listings increased in 2014 though they declined in percentage
terms, and US exchanges were the top favorite for companies listing outside their
domicile nation.
Though valuations for private companies remain quite high, thus depressing the need for
capital from the public markets, the positive sentiment generated by the high-performing
technology IPOs in 2014, the surge in fourth quarter IPOs (34 versus 18 in the third
quarter) and the continued strength of the capital markets fuels anticipation that the 2015
technology IPO market will stay at a healthy pace.
If you would like to discuss these findings and how they may impact your business, please
reach out to me or any member of our global technology team listed at the back of this
document.
Sincerely,
Raman Chitkara
Global Technology Industry Leader
*Issue size greater than US$40 million (includes overallotment) and based on trade date
Global Technology IPO Review Full-year and Q4 2014
1
Contents
Executive summary
4
Driven by Alibaba, the second half of 2014 surged
5
Chinese technology IPOs return in 2014
6
E-commerce growth and innovation have kept Internet Software & Services and Software ahead of all
8
Full-year 2014 technology IPO summary
9
Geographic distribution
11
Subsector distribution
16
Stock exchange distribution
21
Cross-border listings
22
Technology IPO listing detail
23
2010-2014 technology IPO summary
26
Summary by subsector
27
Q4 2014 technology IPO summary
31
Top 10 technology IPOs
32
Geographic distribution
33
Subsector distribution
39
Stock exchange distribution
40
Cross-border listings
43
Key financials
44
Valuation metrics
48
Top three subsectors in Q4 2014
50
Methodology
62
Contacts
63
About PwC’s Technology Institute
64
About PwC
64
Global Technology IPO Review Full-year and Q4 2014
3
Executive summary
Following a lackluster performance during 2011 through 2013, the global technology IPO
market posted its best year of the decade in 2014, with the highest number of offerings (118)
and highest proceeds (US$51.2bn).
Year over year, total proceeds jumped by 347% and the number of deals grew by 84%. During
the period 2010-2014, total proceeds of US$119.6bn were raised from 447 deals—2014 alone
contributed 43% of the proceeds and 26% of the deals. Strong capital markets, relatively low
volatility during most of 2014, the reopening of the Chinese exchanges and improvements in
Europe all contributed to the strong performance.
In 2014 we also saw much broader global participation with 19 countries across 16
exchanges—this was also the highest for the period 2010-2014. Despite geopolitical incidents
creating global market tensions, the technology IPO market showed resilience.
Figure 1: Technology IPOs 2010–2014
60,000
140
$51,193
109
118
40,000
87
64
$23,155
20,000
$17,952
80
60
$15,857
40
$11,446
10,000
20
0
0
2010
2011
2012
Total proceeds (US$mn)
2013
2014 w/o
Alibaba
Total number of deals
Source: Dealogic with analysis by PwC.
4
120
100
$29,426
69
30,000
117
Global Technology IPO Review Full-year and Q4 2014
2014
Number of IPOs
In US$mn
50,000
"What's impressive about
2014 results is not just that
it was the best technology
IPO market of the decade,
but that there was such
broad participation across
the globe with 16 exchanges
and companies from 19
countries. There is great
excitement about the
opportunities technology is
bringing to all industries as
is evident from the strong
investor enthusiasm for
IPOs of technology
companies."
−Raman Chitkara
Global Technology Industry
Leader, PwC
Driven by Alibaba, the second half of 2014 surged
Proceeds raised in the second half of 2014 jumped almost 70% to US$32.2bn from
US$19.0bn in the first half due to the Alibaba IPO which contributed 68% (US$21.8bn) of
second-half proceeds. Though the second half saw a 21% pullback in the number of deals,
with 52 versus 66 in the first half, the fourth quarter surge of 34 technology IPOs made a
clear statement about the health of the global tech IPO market and the excitement
introduced by Alibaba’s IPO.
With the US economy continuing to strengthen, Europe making bold moves on
quantitative easing and many of the developing economies refocusing on growth after
changes in political leadership, the year 2015 promises to be another good year for
technology IPOs.
Figure 2: 2010-2014 – 1st half vs 2nd half
66
35,000
55
54
60
53
In US$mn
25,000
52
50
$20,817
$18,955
37
20,000
34
15,000
10,000
$9,253 $8,710
$8,699
27
$7,147
19
5,000
$6,858
$4,588
$2,338
0
50
40
30
20
Number of IPOs
30,000
$32,237 70
10
0
1st Half 2nd 1st Half 2nd 1st Half 2nd 1st Half 2nd 1st Half 2nd
2010 Half 2011 Half 2012 Half 2013 Half 2014 Half
2010
2011
2012
2013
2014
Total proceeds (US$mn)
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
5
Chinese technology IPOs return in 2014
Chinese technology IPOs accounted for 38% of the volume in 2014, compared to 13% in 2013,
and 57% of the proceeds compared to 9% in 2013. The resurgence of Chinese IPOs was due to
the lifting of the freeze by the China Securities Regulatory Commission (CSRC). Chinese
exchange listings accounted for 29% of the volume in 2014 compared to zero deals in 2013.
However, the world’s biggest IPO, Alibaba.com, listed on the NYSE, a clear recognition of deep
liquidity of the US capital markets and greater freedom allowed by them as it relates to
structuring multiple classes of shareholders.1 Looking forward, it is expected we will continue
to see some Chinese companies list on US exchanges, but also anticipate a return to the robust
technology IPO market seen in China during 2009 through 2011.
Figure 3: 2010-2014 Full-year Chinese technology IPOs
80
70
$29,063
30,000
60
In US$mn
25,000
50
50
20,000
45
33
15,000
10,000
$9,249
$2,439
20
8
10
$1,026
0
0
2010
2011
2012
Total proceeds (US$mn)
2013
Number of deals
Source: Dealogic with analysis by PwC.
http://www.ft.com/intl/cms/s/0/c96004f8-2d25-11e4-911b
00144feabdc0.html#axzz3PLAgTBcu
6
40
30
$7,415
5,000
1
70
Global Technology IPO Review Full-year and Q4 2014
2014
Number of IPOs
35,000
"Alibaba is a huge inspiration
for Chinese technology
companies to capture a higher
market valuation. The large
number of China tech IPOs in
2014 has also boosted the
confidence of private equity
investors and venture
capitalists which led to healthy
US dollar-denominated
fundraising by technology
companies in the Chinese
market."
− Jianbin Gao
Technology Industry Leader,
PwC China
Europe and Japan make a comeback despite difficult market conditions
The European technology IPO market made a comeback in 2014, raising US$6.8bn from
14 offerings, compared to US$1.5bn from eight offerings in 2013. During the period 20102012, Europe had been a witness to falling proceeds and listings, but this trend started
reversing in 2013 and accelerated in 2014.
The UK was the leading country seeing seven deals with total proceeds of US$3.3bn
(48%). The European region witnessed participation from a total of eight countries
(Belgium, France, Germany, Ireland, Luxembourg, Netherlands, Norway and the UK)
compared to five countries (France, Germany, Luxembourg, Switzerland and the UK)
in 2013.
Figure 4: 2010-2014 Full-year European technology IPOs
7,000
14
In US$mn
6,000
5,000
4,000
14
12
$4,532
10
6
$1,846
1,000
8
8
6
3,000
2,000
6
3
4
$1,485
2
$352
0
0
2010
2011
Issue size (US$ mn)
2012
2013
2014
Number of IPOs (Right axis)
Source: Dealogic with analysis by PwC.
Japan had four technology IPOs raising US$4.2bn, compared to three deals raising
US$321mn in 2013. The largest deal was Japan Display Inc, which raised proceeds of
US$3bn in the first quarter of 2014.
Figure 5: 2010-2014 Full-year Japanese technology IPOs
$4,221
4,500
4,000
4
3,000
2.5
2,000
1,000
500
3.5
3.0
3
2,500
1,500
4.5
4.0
3,500
In US$mn
−Werner Ballhaus
European Technology
Industry Leader, PwC
Germany
16
Number of IPOs
$6,773
8,000
2.0
1
$1,171
1.5
1.0
1
$66
1
$48
$321
2011
2012
2013
Number of IPOs
"Although you probably
have noticed a bit of
volatility in the European
market in 2014, we
continue to see healthy
investor interest as the
economy recovers. This is
especially true for the
technology sector where a
number of thriving
startup centers, such as
Berlin, have developed."
0.5
0
0.0
2010
Issue size (US$ mn)
2014
Number of IPOs (Right axis)
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
7
E-commerce growth and innovation have kept Internet Software &
Services and Software ahead of all
From the subsector perspective, the Internet Software & Services and Software subsectors
together have raised the highest proceeds, contributing 79% of the total proceeds and 69% of
the total deals, as compared to 64% of the proceeds and 66% of deals in 2013. The two
subsectors have consistently held their place in the last five years, driven by the rapid increase
in e-commerce and innovations in mobile and social. Given the growth in the digital economy,
it is expected that these two sectors will remain the favorites for some time to come.
8
Global Technology IPO Review Full-year and Q4 2014
Full-year 2014 technology
IPO summary
The global technology IPO market in 2014 was the best in the last ten years, with 118 IPOs
raising US$51.2bn in proceeds. This year witnessed the big ticket IPO of Alibaba.com worth
US$21.8bn, though even without this deal, total proceeds raised by 117 listings were worth
US$29.4bn—the highest in the past five years. Q4 2014 saw a jump of 89% in the number of
listings to 34 against 18 offerings in Q3 2014.
Proceeds raised declined, primarily due to inclusion of Alibaba’s IPO proceeds in Q3.
Excluding Alibaba from Q3 2014 numbers, Q4 2014 experienced a 150% rise in proceeds from
US$3bn in Q3 to US$7.5bn in Q4.
30,000
40
45
40
35
30
25
20
15
10
5
0
$24,785
25,000
In US$mn
34
20,000
26
15,000
10,000
$12,116
18
$7,453
$6,839
5,000
0
Q1
Q2
Total proceeds (US$mn)
Q3
Number of IPOs
Figure 6: 2014 Global technology IPOs
Q4
Number of deals
Source: Dealogic with analysis by PwC.
Figure 7: 2013 Global technology IPOs
25
In US$mn
5,000
4,000
15
12
10
25
20
17
3,000
$2,870
2,000
1,000
30
$5,588
10
$1,270
$1,718
Number of IPOs
6,000
5
0
0
Q1
Q2
Total proceeds (US$mn)
Q3
Q4
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
9
Figure 8: 2012 Global technology IPOs
20,000
30
35
$17,779
30
16,000
25
In US$mn
14,000
12,000
20
20
10,000
15
8,000
11
6,000
4,000
10
8
$3,039
2,000
$994
$1,344
Q3
Q4
0
0
Q1
Q2
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
10
Global Technology IPO Review Full-year and Q4 2014
5
Number of deals
Number of IPOs
18,000
Geographic distribution
In 2014, technology IPOs witnessed the broadest geographic participation of the last five
years. Nineteen countries were represented in 2014 compared to 15 in 2010, 11 in 2011, just 6
in 2012 and 16 in 2013.
China’s re-emergence marked the biggest change in year-over-year activity. With 45 listings
and proceeds worth US$29.1bn in 2014, China surpassed its 2013 figures fourfold (463%) in
the number of issues (8) and by 28 times in proceeds (US$1bn). Until 2013, the best year for
China in terms of proceeds and number of technology IPOs was 2010. Chinese companies
raised US$9.2bn from 70 deals in 2010. However, beyond 2010, proceeds from IPOs, and the
number of technology companies going public declined the next three years. In 2014, China
raised the highest proceeds in five years, mainly driven by the IPO of Alibaba.
The US was in second place in 2014 with 37 deals and proceeds worth US$7.9bn. Compared to
2013, the growth in number of deals was 6% from 35 deals, while proceeds grew by 3% from
US$7.5bn. In the last five years, the US has experienced consistent growth in technology IPOs.
During the period 2010 to 2014, US technology companies raised proceeds worth US$42.8bn
from 147 deals, while Chinese technology companies raised US$49.2bn from 206 deals. The
average deal size of US IPOs was 22% larger than that of the Chinese IPOs.
“The UK tech market
continues to produce good,
credible IPO candidates and
the pipeline remains strong.
Further, the IPOs have been
focused on retail, consumer
and ‘fintech’, confirming
that the UK is a leading tech
country for consumer
adoption of new
technologies.”
− Jass Sarai
Technology Industry
Leader, PwC UK
The UK also joined the ‘billion league’ in 2014 with proceeds of US$3.3bn from seven deals.
The UK alone contributed 48% of total proceeds raised by European companies. In 2013, the
UK raised only US$730mn from four deals. The other European countries participating in
2014 were Belgium, France, Germany, Ireland, Luxembourg, the Netherlands and Norway,
which helped Europe reach total proceeds worth US$6.8bn.
Japan contributed four IPOs with total proceeds of US$4.2bn, compared to three listings
worth US$321mn in 2013. The two largest offerings in Japan were Japan Display Inc
(US$3bn) and Hitachi Maxell Ltd (US$706mn). Both IPOs were listed on the Tokyo Stock
Exchange in Q1 2014, when investor confidence was strong.2
South Korea and Israel also raised over a billion in proceeds with three and four listings
raising US$1.2bn and US$1.1bn, respectively. Seven technology companies went public from
Australia (4) and New Zealand (3), raising US$336mn and US$259mn, respectively.
Other countries with one IPO each were Germany (US$2bn), France (US$782mn), Ireland
(US$500mn), the Netherlands (US$188mn), Malaysia (US$169mn), Norway (US$107mn),
Belgium (US$96mn), Canada (US$92mn), Luxembourg (US$59mn), South Africa
(US$44mn) and Indonesia (US$42mn).
2
http://www.cnbc.com/id/101978396
Global Technology IPO Review Full-year and Q4 2014
11
Figure 9: Full-year 2014 technology IPOs – Geographic distribution
50
45
45
30,000
In US$mn
40
37
$29,063
25,000
35
30
20,000
25
15,000
20
10,000
$7,850
11
$4,221
5,000
4
China
United States
Japan
$1,245
United
Kingdom
15
10
$3,277
7
0
Number of IPOs
35,000
$1,101
4
3
South Korea
Total proceeds (US$mn)
Israel
$336
$3,843
$259
3
4
Australia
5
0
New Zealand
Others
Number of deals
Source: Dealogic with analysis by PwC.
Looking at the distribution by region, Asia was the clear leader in 2014 with 61 IPOs and US$35.3bn in proceeds. Almost three times as
many technology companies from North America went public compared to Europe, but proceeds were just 17% higher.
Figure 10: Full-year 2014 technology IPOs – Regional distribution
70
61
In US$mn
35,000
30,000
60
$35,334
50
25,000
38
40
20,000
30
15,000
$7,942
10,000
20
14
5
5,000
$6,773
0
Asia
North America
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
12
Global Technology IPO Review Full-year and Q4 2014
Europe
Number of deals
10
$1,145
RoW
0
Number of IPOs
40,000
"The US technology IPO market
continues to be a leader in both
number and volume of listings
led by e-commerce, SaaS and
cloud-based technology offerings.
Looking ahead into 2015, the IPO
pipeline remains strong
indicating significant growth
opportunities and momentum."
−Alan Jones
Deals Partner, PwC US
Figure 11: 2010-2014 US technology IPOs
25,000
40
35
37
32
35
30
24
15,000
$20,316
25
19
20
10,000
$7,591
$7,850
$4,926
15
Number of IPOs
In US$mn
20,000
10
5,000
$2,150
5
0
0
2010
2011
Total proceeds (US$mn)
2012
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
13
"The volatility of the Chinese
capital markets, capricious
changes in policy, and complex
listing issues have led to many
Chinese tech companies favoring
US stock exchanges over Chinese
domicile exchanges in 2014.
However, with the successful
launch of the Shanghai-Hong
Kong Connect Program in
November 2014, Chinese stock
markets have become more
competitive and should do well in
2015.”
− Jianbin Gao
Technology Industry Leader,
PwC China
Figure 12: 2010-2014 Chinese technology IPOs
80
70
$29,063
70
In US$mn
30,000
60
25,000
50
50
20,000
45
40
33
15,000
30
10,000
$9,249
$7,415
20
8
5,000
10
$2,439
$1,026
0
0
2010
2011
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
14
Global Technology IPO Review Full-year and Q4 2014
2012
2013
Number of deals
2014
Number of IPOs
35,000
Figure 13: 2010-2014 European technology IPOs
8,000
16
$6,773
14
14
6,000
5,000
$4,532
4,000
6
12
10
8
8
6
3,000
6
$1,846
2,000
3
$1,485
Number of IPOs
In US$mn
7,000
4
1,000
2
$352
0
0
2010
2011
2012
Total proceeds (US$mn)
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 14: 2010-2014 Japanese technology IPOs
$4,221
4,500
5
4,000
In US$mn
3
3,000
4
3
2,500
2,000
2
1,500
$1,171
1
Number of IPOs
4
3,500
1
1,000
1
1
500
$66
$48
0
2010
$321
2011
Total proceeds (US$mn)
2012
0
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
15
Subsector distribution
Internet Software & Services led the subsectors in 2014 with 47 deals raising US$33.5bn. It
was the most active sector during the year, contributing 65% of total proceeds and 40% of
total listings as compared to 43% of the proceeds and 38% of total listings in 2013. The sector
was primarily boosted by Alibaba’s IPO which raised the highest proceeds in history.
Excluding Alibaba, Internet Software & Services was still the highest in the group with
proceeds of US$11.7bn.
The Software subsector has been maintaining its position as the second most important
technology subsector after Internet Software & Services. It raised US$7.1bn from 35 deals in
2014. The subsector contributed 14% of total proceeds and 30% of the total listings in 2014,
compared to 21% of the proceeds and 28% of the listings in 2013. The largest IPO in this sector
was Markit Ltd from the UK which raised US$1.2bn, while the smallest listing was Cartrack
Holdings Limited from South Africa which raised US$44mn.
Computer Storage & Peripherals demonstrated marked improvement in proceeds in 2014, but
not in volume. The subsector raised US$4.7bn from five deals compared to US$1.6bn from
eight deals in 2013. A reflection of the market at large, the subsector continues to struggle,
posting no deals during Q4 2014. It accounted for 9% of the total proceeds and 4% of the total
deals during the year. Japan Display Inc from Japan raised the highest proceeds of US$3.1bn,
while Hubei Feilihua Quartz Glass Co Ltd from China was the smallest IPO in the sector,
raising US$50mn.
IT Consulting & Services improved in 2014 with proceeds of US$2.2bn from six deals
compared to US$538mn from three deals in 2013. The subsector accounted for 4% of the total
proceeds and 5% of total listings. IMS Health Holdings Inc from the US raised the highest
proceeds of US$1.4bn, while Citadel Group Ltd had the smallest issue of US$41mn.
Semiconductors made a comeback in 2014 due in large part to the reopening of the Chinese
IPO market. The subsector raised US$1.8bn and had 12 listings during the year, compared to
US$308mn from four listings in 2013. Of the 12 listings, 10 were Chinese companies that
listed in China. The subsector accounted for 4% of the total proceeds and 10% of the total
listings in 2014. Hua Hong Semiconductor Ltd from China raised the highest proceeds of
US$332mn, while Jiangsu Pacific Quartz Co Ltd had the smallest issue of US$59mn.
Communications Equipment was the only sector which witnessed a drop in total proceeds in
2014 when compared to 2013. The subsector raised total proceeds of US$1.1bn from nine
listings during the current year, while in 2013 it raised US$1.5bn from five listings. In 2014, it
accounted for 2% of the total proceeds raised and 8% of the total listings. The average deal size
of the subsector declined by 62% in 2014 compared to 2013. The largest deal was from Arista
Networks Inc from the US which raised US$226mn, while the smallest deal was of Link Net
PT of Indonesia which raised US$42mn.
16
Global Technology IPO Review Full-year and Q4 2014
Figure 15: Full-year 2014 subsector distribution
47
40,000
50
45
$33,491
In US$mn
40
35
30,000
35
25,000
30
20,000
25
15,000
20
Number of IPOs
35,000
15
10,000
$7,129
5,000
0
Internet Software
& Services
Software
6
5
$4,740
$2,222
Computer
Storage &
Peripherals
IT Consulting &
Services
12
9
10
$770
$1,812
$1,029
5
4
0
Semiconductors Communications
Equipment
Total proceeds (US$mn)
Others
Number of deals
Source: Dealogic with analysis by PwC.
Quarterly summary by subsector
Figure 16: Full-year 2014 Internet Software & Services IPOs
25,000
25
$22,813
20
20
15,000
15
11
10
10,000
10
Number of IPOs
In US$mn
20,000
6
$5,131
5,000
$3,772
5
$1,775
0
0
Q1 2014
Q2 2014
Total proceeds (US$mn)
Q3 2014
Q4 2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
17
Figure 17: Full-year 2014 Software IPOs
13
3,500
14
$3,095
12
In US$mn
11
$2,371
2,500
10
2,000
8
6
1,500
5
6
$1,272
1,000
500
Number of IPOs
3,000
4
$391
2
0
0
Q1 2014
Q2 2014
Q3 2014
Total proceeds (US$mn)
Q4 2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 18: Full-year 2014 Computer Storage & Peripherals IPOs
4,000
3
$3,790
3,000
2
2
2
2,500
2,000
1
1,500
1
1,000
$782
500
$167
$0
0
Q1 2014
Q2 2014
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
18
-
Global Technology IPO Review Full-year and Q4 2014
Q3 2014
Number of deals
Q4 2014
0
Number of IPOs
In US$mn
3,500
Figure 19: Full-year 2014 Semiconductor IPOs
800
5
$718
4
In US$mn
4
4
600
500
400
3
$533
2
2
2
300
200
$246
$315
Number of IPOs
700
1
100
0
0
Q1 2014
Q2 2014
Total proceeds (US$mn)
Q3 2014
Q4 2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 20: Full-year 2014 IT Consulting & Services IPOs
4
In US$mn
2,000
1,500
$1,907
3
2
2
1,000
2
2
Number of IPOs
2,500
1
500
$210
-$0
$106
Q3 2014
Q4 2014
0
0
Q1 2014
Q2 2014
Total proceeds (US$mn)
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
19
Figure 21: Full-year 2014 Communications Equipment IPOs
4
400
4
$427
$334
In US$mn
350
3
3
300
$268
250
2
200
2
Number of IPOs
450
150
1
100
50
-
$0
0
Q1 2014
Q2 2014
Q3 2014
Total proceeds (US$mn)
0
Q4 2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 22: Full-year 2014 other subsector IPOs
700
4
$618
3
500
400
2
2
2
300
200
$152
100
$0
0
-
Q1 2014
$0
Q2 2014
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
20
1
Global Technology IPO Review Full-year and Q4 2014
Q3 2014
Number of deals
0
Q4 2014
Number of IPOs
In US$mn
600
Stock exchange distribution
US exchanges (NYSE and NASDAQ) accounted for 71% of the total proceeds and 47% of the
total listings in 2014. This was lower than 2013 when the exchanges accounted for 80% of
the total proceeds and 70% of the total listings. As noted earlier, the reopening of China’s
IPO market was the primary factor impacting the decline in US share. The US exchanges
together accounted for US$36.1bn and the NYSE listed the big ticket IPO of Alibaba. The
NYSE surpassed NASDAQ in both proceeds and number of listings and accounted for 81% of
the proceeds and 54% of the listings in the US.
The NYSE alone raised US$29.4bn from 30 listings, while proceeds from NASDAQ were
US$6.8bn from 26 listings. In addition, 27% of the offerings listed on the NYSE were non-US
companies (8) compared to 22% (6) in 2013, while 42% of the companies listed on NASDAQ
in 2014 were non-US companies (11). The average deal size in the US exchanges was
US$645mn.
Over the last five years (2010-2014), the number of listings has been gradually rising on the
NYSE while that of NASDAQ has been falling. In 2012, the NYSE overtook NASDAQ in
terms of volume (18 technology company listings versus 16) and in 2013 it surpassed
NASDAQ in both volume and proceeds.
The US exchanges surpassed the Chinese exchanges (Shenzhen, Shanghai and Hong Kong)
in both volume and proceeds in 2014. Together, the Chinese exchanges raised US$4.1bn
from 34 listings. Compared to the US exchanges, the Chinese exchanges saw smaller IPOs
with an average deal size of US$119mn, whereas the US exchanges had an average deal size
of US$645mn. The Hong Kong exchange accounted for 38% of total proceeds raised in
China, which was the highest among the three Chinese exchanges. The Shenzhen exchange
accounted for the highest deal volume, contributing 47% of all listings in the Chinese
exchanges. No foreign companies listed in China in 2014.
The London AIM raised US$2.1bn from eight listings in 2014, compared to US$730mn from
four listings in 2013. The first half of the year for European exchanges was positive due in
part to US capital investment in European equities.
The Tokyo Stock Exchange, too, showed resilience in 2014 with proceeds of US$4.2bn from
four listings. Though the Japanese economy continues to struggle and officially re-entered
recession in the third quarter of 20143, the technology IPO market of Japan bucked the
trend. Three of the four listings were listed in the first half of 2014, when investor confidence
was higher. Only one deal listed in December 2014.
Figure 23: 2014 Stock exchange distribution
30,000
35
$29,369
30
30
In US$mn
26
25,000
25
20,000
20
16
15,000
15
10
10,000
5,000
8
8
$6,755
$1,395
$1,106
NASDAQ
Shenzhen
Shanghai
3
$336
$259
ASX
NZSE
$1,557
0
NYSE
4
SEHK
Total proceeds (US$mn)
4
9
$4,077
$2,119
$4,221
LSE
Tokyo SE
10
Number of IPOs
35,000
5
0
Others
Number of deals
Source: Dealogic with analysis by PwC.
3
http://www.nytimes.com/2014/11/17/business/international/defying-expectations-japans-economy-shrinks-further.html?_r=0
Global Technology IPO Review Full-year and Q4 2014
21
Cross-border listings
Cross-border listings in 2014 constituted 18% of the total, with 21 offerings listing on foreign
exchanges. The percentage of cross-border listings rose in 2012 (23%) due to the CSRC action
in China, but in 2013 (17%) and 2014 (18%), it returned to prior levels as Chinese tech
companies were not forced to seek out alternate exchanges. Of the 21 cross-border listings in
2014, 52% of the listings were Chinese companies listing on US exchanges (NYSE and
NASDAQ). Israel was the next highest with 19% (4) of the listings. Two of Israel’s companies
listed on the NYSE and NASDAQ, while the other two companies listed on the London
exchange. Other cross-border listings included Belgium, Luxembourg, Malaysia, the
Netherlands and the UK with one deal each. The US exchanges were the preferred destination
garnering 90% (19) of the cross-border listings.
Figure 24: 2010–2014 Cross-border listings
140
120
21
100
19
17%
13
15%
80
16
60
40
23%
11
17%
97
90
74
20
53
53
2012
2013
0
2010
2011
Domestic deals
Source: Dealogic with analysis by PwC.
22
Global Technology IPO Review Full-year and Q4 2014
Cross-border deals
2014
18%
Technology IPO listing detail
Table 1: 2014 IPOs – By issue date
Issue date
Company
Sector
Proceeds
(US$ mn)
Primary
exchange
Domicile
nation
Internet Software & Services
Software
Semiconductors
82
86
66
Shenzhen
Shenzhen
Shenzhen
China
China
China
Internet Software & Services
Software
Software
Communications Equipment
91
103
49
43
NYSE
Shenzhen
Shenzhen
Shenzhen
United States
China
China
China
IT Consulting & Services
67
Shenzhen
China
Software
IT Consulting & Services
47
143
Shenzhen
Shenzhen
China
China
01/29/2014
02/10/2014
02/28/2014
03/07/2014
03/14/2014
03/18/2014
Guangdong Qtone Education Co Ltd
Beijing Forever Technology Co Ltd
Yangzhou Yangjie Electronic Technology
Co Ltd
Care.com, Inc
DigiWin Software Co Ltd
Shenzhen Ysstech Info-Tech Co Ltd
Sichuan Troy Information Technology Co
Ltd
Shanghai Amarsoft Information
Technology Co Ltd
Beijing Tongtech Co Ltd
NSFOCUS Information Technology Co
Ltd
NetPosa Technologies, Ltd
China Wafer Level CSP Co Ltd
Varonis Systems, Inc
Coupons.com, Inc
Castlight Health, Inc
Hitachi Maxell Ltd
121
180
106
168
178
706
Shenzhen
Shanghai
NASDAQ
NYSE
NYSE
Tokyo SE
China
China
United States
United States
United States
Japan
03/19/2014
Japan Display, Inc
3,084
Tokyo SE
Japan
03/19/2014
03/20/2014
03/21/2014
03/21/2014
03/21/2014
03/26/2014
03/27/2014
03/28/2014
03/28/2014
Q2
04/01/2014
04/03/2014
04/03/2014
04/03/2014
04/03/2014
04/03/2014
04/09/2014
04/14/2014
04/16/2014
04/16/2014
04/16/2014
05/07/2014
05/08/2014
Paylocity Holding Corp
Q2 Holdings, Inc
A10 Networks, Inc
Amber Road, Inc
Borderfree, Inc
King Digital Entertainment Plc
TriNet Group, Inc
2U, Inc
Aerohive Networks, Inc
Communications Equipment
Semiconductors
Software
Internet Software & Services
Internet Software & Services
Computer Storage &
Peripherals
Computer Storage &
Peripherals
Internet Software & Services
Internet Software & Services
Communications Equipment
Internet Software & Services
Internet Software & Services
Internet Software & Services
Internet Software & Services
Internet Software & Services
Communications Equipment
120
101
188
96
80
500
240
119
75
NASDAQ
NYSE
NYSE
NYSE
NASDAQ
NYSE
NYSE
NASDAQ
NYSE
United States
United States
United States
United States
United States
Ireland
United States
United States
United States
The Rubicon Project, Inc
IMS Health Holdings Inc
GrubHub Inc
Opower Inc
Five9 Inc
JUST EAT Plc
BAIOO Family Interactive Limited
Paycom Software Inc
Sabre Corp
Weibo Corp
Leju Holdings Limited
Cheetah Mobile Inc
Tuniu Corp
Internet Software & Services
IT Consulting & Services
Internet Software & Services
Software
Internet Software & Services
Internet Software & Services
Internet Software & Services
Internet Software & Services
Software
Internet Software & Services
Internet Software & Services
Software
Internet Software & Services
102
1,495
221
133
81
597
196
115
721
328
100
193
83
NYSE
NYSE
NYSE
NYSE
NASDAQ
LSE
SEHK
NYSE
NASDAQ
NASDAQ
NYSE
NYSE
NASDAQ
United States
United States
United States
United States
United States
United Kingdom
China
United States
United States
China
China
China
China
Q1
01/21/2014
01/23/2014
01/23/2014
01/24/2014
01/27/2014
01/27/2014
01/27/2014
01/28/2014
01/28/2014
01/29/2014
Global Technology IPO Review Full-year and Q4 2014
23
Issue date
Company
Sector
Proceeds
(US$ mn)
Primary
exchange
Domicile
nation
Q2
05/13/2014
05/14/2014
05/15/2014
05/16/2014
05/21/2014
05/21/2014
05/22/2014
06/03/2014
06/05/2014
06/06/2014
06/06/2014
06/11/2014
06/11/2014
06/16/2014
06/17/2014
06/17/2014
06/18/2014
06/23/2014
06/23/2014
06/23/2014
06/23/2014
06/24/2014
06/18/2014
06/24/2014
06/25/2014
06/25/2014
06/26/2014
Link Net PT
Zendesk Inc
TrueCar Inc
Jumei International holding Ltd
SunEdison Semiconductor Ltd
JD.com, Inc
Marimedia Ltd
Kinaxis Inc
Arista Networks, Inc
Game Digital Plc
Gentrack Group Ltd
MobileIron Inc
Zhaopin Ltd
Feitian Technologies Co Ltd
FDM Group(Holdings)PLC
Guangdong Ellington Electn
Zoopla Property Group PLC
Chanjet Information Technology
VOYAGE GROUP Inc
Xunlei Ltd
IMImobile Ltd
Imprivata Inc
Markit Ltd
Materialise NV
GoPro Inc
Ourgame International Holdings
Worldline SA
Communications Equipment
Software
Internet Software & Services
Internet Software & Services
Semiconductors
Internet Software & Services
Software
Internet Software & Services
Communications Equipment
Software
Software
Software
Internet Software & Services
Electronics
IT Consulting & Services
Semiconductors
Internet Software & Services
Software
Internet Software & Services
Internet Software & Services
Internet Software & Services
Internet Software & Services
Software
Software
Electronics
Internet Software & Services
Computer Storage &
Peripherals
42
115
80
245
94
1,780
50
92
226
203
84
100
76
126
412
221
598
116
103
101
51
75
1,283
96
491
107
782
JKSE
NYSE
NASDAQ
NYSE
NASDAQ
NASDAQ
LSE
TSX
NYSE
LSE
NZSE
NASDAQ
NYSE
Shanghai
LSE
Shanghai
LSE
SEHK
Tokyo SE
NASDAQ
LSE
NYSE
NASDAQ
NASDAQ
NASDAQ
SEHK
EPA
Indonesia
United States
United States
China
United States
China
Israel
Canada
United States
United Kingdom
New Zealand
United States
China
China
United Kingdom
China
United Kingdom
China
Japan
China
United Kingdom
United States
United Kingdom
Belgium
United States
China
France
Smartgroup Corporation Ltd
Tian Ge Interactive Holdings Limited
Cogobuy Group
Globant SA
TubeMogul, Inc
Mobileye NV
Shenzhen Absen Optoelectronic Co Ltd
iDreamSky Technology Limited
Vista Group International Limited
Jolywood (Suzhou) Sunwatt Co Ltd
Hollyland (China) Electronics Technology
Corporation Limited
Alibaba Group Holding Ltd
CyberArk Software
Travelport Worldwide
Crossrider Plc
Hangzhou First Pv Material Co Ltd
XiAn Tian He Defense Technology Co
Ltd
Hubei Feilihua Quartz Glass Co Ltd
Internet Software & Services
Internet Software & Services
Internet Software & Services
Software
Software
Software
Semiconductors
Software
Software
Semiconductors
Semiconductors
106
207
177
59
44
890
59
116
79
80
129
ASX
SEHK
SEHK
NYSE
NASDAQ
NYSE
Shenzhen
NASDAQ
NZSE
Shenzhen
Shanghai
Australia
China
China
Luxembourg
United States
Israel
China
China
New Zealand
China
China
Internet Software & Services
Software
Internet Software & Services
Internet Software & Services
Semiconductors
Computer Storage &
Peripherals
Computer Storage &
Peripherals
21,767
86
480
75
265
117
NYSE
NASDAQ
NYSE
LSE
Shanghai
Shenzhen
China
Israel
United States
Israel
China
China
50
Shenzhen
China
Q3
07/02/2014
07/08/2014
07/17/2014
07/17/2014
07/17/2014
07/31/2014
07/31/2014
08/06/2014
08/08/2014
08/27/2014
8/27/2014
09/18/2014
09/23/2014
09/24/2014
09/30/2014
9/01/2014
9/01/2014
9/01/2014
24
Global Technology IPO Review Full-year and Q4 2014
Issue date
Company
Sector
Proceeds
(US$ mn)
Primary
exchange
Domicile
nation
Q4
10/02/2014
10/02/2014
10/03/2014
10/06/2014
Rocket Internet AG
Scatec Solar ASA
Yodlee Inc
DEVSISTERS Corp
Internet Software & Services
Semiconductors
Software
Software
1,764
107
75
133
Germany
Norway
United States
South Korea
10/09/2014
10/10/2014
10/10/2014
10/15/2014
10/31/2014
11/05/2014
MOL Global Inc
Gamma Communications Plc
HubSpot Inc
Hua Hong Semiconductor Ltd
Jiangsu Pacific Quartz Co Ltd
Spigen Korea Co Ltd
Internet Software & Services
Communications Equipment
Software
Semiconductors
Semiconductors
Communications Equipment
169
133
125
332
59
49
11/06/2014
Sugon Info Ind Co Ltd/Dawning
Information Industry Co Ltd
Upland Software Inc
Citadel Group Ltd
Samsung SDS Co Ltd
IT Consulting & Services
65
XTRA
OSE
NASDAQ
South
Korea
NASDAQ
LSE
NYSE
SEHK
Shanghai
South
Korea
Shanghai
Software
IT Consulting & Services
Software
46
41
1,063
United States
Australia
South Korea
Cnova NV
Orion Health Group Ltd
Q Technology (Group) Co Ltd
Chaozhou Three-Circle Group Co Ltd
Tianjin Keyvia Electric Co.,Ltd
Feiyu Technology
Aconex Ltd
Yangtze Optical Fibre And Cable Joint
Stock Limited Company
LendingClub Corporation/Liberty Corp
Momo Inc
New Relic Inc
Workiva Inc
Hortonworks Inc
Connecture Inc
Surfstitch Group Ltd
OnDeck Capital Inc
Gumi Inc
Cartrack Holdings Limited
Linekong Interactive Co Ltd
Linewell Software Co Ltd
Internet Software & Services
Software
Electronics
Semiconductors
Electronics
Software
Internet Software & Services
Communications Equipment
188
96
90
220
62
85
117
152
NASDAQ
ASX
South
Korea
NASDAQ
NZSE
SEHK
Shenzhen
Shenzhen
SEHK
ASX
SEHK
Internet Software & Services
Internet Software & Services
Software
Software
Software
Internet Software & Services
Internet Software & Services
Internet Software & Services
Software
Software
Internet Software & Services
Software
870
216
115
101
100
53
71
230
328
44
93
60
NYSE
NASDAQ
NYSE
NYSE
NASDAQ
NASDAQ
ASX
NYSE
Tokyo SE
JSE
SEHK
Shanghai
United States
China
United States
United States
United States
United States
Australia
United States
Japan
South Africa
China
China
11/06/2014
11/12/2014
11/14/2014
11/20/2014
11/26/2014
12/02/2014
12/03/2014
12/04/2014
12/05/2014
12/09/2014
12/10/2014
12/11/2014
12/11/2014
12/12/2014
12/12/2014
12/12/2014
12/12/2014
12/16/2014
12/16/2014
12/18/2014
12/22/2014
12/30/2014
12/30/2014
Malaysia
United Kingdom
United States
China
China
South Korea
China
Netherlands
New Zealand
China
China
China
China
Australia
China
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
25
2010-2014 technology IPO
summary
During the period 2010-2014, technology IPOs raised total proceeds of US$119.6bn from 447
listings. In the last five years, 2014 has been the best year for technology IPOs contributing
43% of proceeds and 26% of offerings. The number of listings witnessed a consistent drop
from 109 in 2010 to 64 in 2013, but shot up in 2014 to 118, owing to strong capital markets
and investor interest in participating and benefiting from the digital revolution. Total
proceeds also exhibited a steady decline from 2010 (excluding the US$16bn Facebook IPO in
2012) to 2013, which was reversed in 2014. During the period 2010-2014, total proceeds
witnessed a CAGR of 30%, and a CAGR of 13% (excluding Alibaba’s IPO).
The Internet Software & Services subsector has consistently outperformed all other sectors in
the last four years (2011-2014), and has raised a total of US$63.5bn from 112 listings. The
Alibaba.com IPO further boosted the subsector’s performance. Given the increase and rapid
acceptance of e-commerce and mobile solutions, Internet Software & Services is likely benefit
for some time to come.
The Software subsector has maintained second place during the last three years (2012-2014),
raising proceeds of US$12.2bn from 72 listings. The three Software innovation mega trends,
which included the shift from desktop computing to mobile computing (including phones and
tablets), from physical infrastructure to cloud and from installed software to software
delivered ‘as-a-service’ (SaaS), have helped the subsector to evolve and hold its place.4
Computer Storage and Peripherals made a comeback in 2014 in terms of proceeds raised after
its lowest contribution in 2012. In the last five years, the subsector has raised a total of
US$9.1bn from 30 listings. In 2014, the subsector raisedUS$4.7bn—more than total proceeds
raised during the period 2010-2013, US$4.4bn.
The Semiconductor subsector also made a comeback in 2014 after its declining performance
over the last four years. The decline was attributable to the freeze in Chinese IPOs imposed by
the CSRC. The subsector raised US$12.2bn from 87 listings during the period 2010-2014.
2014 witnessed proceeds of US$1.8bn from 12 listings. The proceeds raised were the highest
since 2012.
The IT Consulting and Services subsector raised US$2.2bn from six listings in 2014. The
subsector has experienced flat performance since 2011. Between 2010 and 2014 US$8.4bn was
raised from 47 listings.
The Telecommunications Equipment subsector was the only sector which declined in terms of
total proceeds raised. Proceeds fell by 32% in 2014 to US$1bn from US$1.5bn in 2013. During
the period 2010-2014 the subsector raised total proceeds of US$5.7bn from 33 listings.
4
http://www.forbes.com/sites/truebridge/2013/09/17/the-software-revolution-a-sectortrends-series/
26
Global Technology IPO Review Full-year and Q4 2014
Figure 25: 2010-2014 Technology IPOs
60,000
140
$51,193
120
117
109
118
100
40,000
87
69
64
$29,426
30,000
60
$23,155
20,000
80
Number of IPOs
In US$mn
50,000
$17,952
$15,857
40
$11,446
10,000
20
0
0
2010
2011
2012
2013
Total proceeds (US$mn)
2014
2014 w/o Alibaba
Number of deals
Source: Dealogic with analysis by PwC.
Summary by subsector
Figure 26: 2010-2014 Internet Software & Services IPOs
50
47
In US$mn
35,000
$33,491
30,000
45
40
35
25,000
20,000
30
24
26
25
$17,451
20
15,000
Number of IPOs
40,000
15
10,000
7
$7,639
15
10
$4,901
5,000
5
$1,401
0
0
2010
2011
Total proceeds (US$mn)
2012
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
27
Figure 27: 2010-2014 Software IPOs
8,000
40
$7,129
7,000
35
6,000
30
5,000
25
19
4,000
3,000
2,000
18
20
15
12
$2,721
15
$2,396
$1,968
10
$1,040
1,000
Number of IPOs
In US$mn
35
5
0
0
2010
2011
2012
Total proceeds (US$mn)
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 28: 2010-2014 Computer Storage & Peripherals IPOs
8
8
4,500
8
4,000
7
3,500
6
5
3,000
5
4
2,500
2,000
5
4
$1,685
$1,601
3
1,500
2
1,000
$748
500
1
$329
0
0
2010
2011
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
28
9
$4,740
Global Technology IPO Review Full-year and Q4 2014
2012
2013
Number of deals
2014
Number of IPOs
In US$mn
5,000
Figure 29: 2010-2014 Semiconductor IPOs
7,000
45
41
In US$mn
35
$6,109
5,000
30
4,000
25
$2,646
16
3,000
20
15
$1,812
2,000
$1,446
12
$308
0
2010
2011
2012
Total proceeds (US$mn)
15
10
4
1,000
Number of IPOs
40
6,000
2013
5
0
2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 30: 2010-2014 IT Consulting & Services IPOs
5,000
30
24
25
In US$mn
4,000
$4,502
3,500
20
3,000
2,500
$2,222
15
2,000
8
Number of IPOs
4,500
10
1,500
6
1,000
3
$574
500
5
$515
$538
6
0
0
2010
2011
Total proceeds (US$mn)
2012
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
29
Figure 31: 2010-2014 Telecommunications Equipment IPOs
2,500
$2,291
$1,512
1,500
9
5
1,000
8
6
$1,029
4
4
Number of IPOs
10
2,000
In US$mn
12
11
4
$568
500
2
$267
0
0
2010
2011
2012
Total proceeds (US$mn)
2013
2014
Number of deals
Source: Dealogic with analysis by PwC.
Figure 32: 2010-2014 Other subsectors
15
16
1,800
In US$mn
1,600
14
$1,803
12
11
1,400
10
1,200
1,000
$922
8
6
$770
800
6
600
$399
400
4
2
4
200
0
0
2010
2011
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
30
2
$106
Global Technology IPO Review Full-year and Q4 2014
2012
2013
Number of deals
2014
Number of IPOs
2,000
Q4 2014 technology IPO
summary
The technology sector reported 34 IPOs in the fourth quarter. This was higher than all the
quarters under study except for Q2 2014, which reported 40 IPOs. Total proceeds raised
through these IPOs were US$7.5bn, which was lower than the last two quarters. The
significant drop in amount raised (70%) compared to the last quarter was due to Alibaba’s
mega IPO in Q3 2014.
Year over year, the amount raised increased by 33% and the number of IPOs increased 36%.
This quarter witnessed two billion-dollar IPOs—Rocket Internet AG (US$1.76bn) and
Samsung SDS Co Ltd (US$1.06bn). The third biggest tech IPO this quarter was Lending Club
Corporation with US$870mn.
Early indicators are that the strength in Q4 is carrying over to 2015.
Figure 33: Q4 2013–Q4 2014 Global technology IPO trends
45
40
$24,785
25,000
34
40
In US$mn
35
20,000
25
26
30
25
15,000
18
20
$12,116
10,000
$5,588
$7,453
$6,839
Number of IPOs
30,000
15
10
5,000
5
0
0
Q4 2013
Q1 2014
Total proceeds (US$mn)
Q2 2014
Q3 2014
Q4 2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
31
Top 10 technology IPOs
Internet Software & Services again dominated the top 10 listings for the quarter, with 60%
share. The Software and Semiconductor subsectors followed with two each in the top 10.
Total proceeds from the top 10 IPOs came to US$5.4bn. US stock exchanges led the way with
five companies out of the top 10 listed in the US. In terms of participation, there were seven
exchanges where the top 10 IPOs raised funds indicating a healthier market for tech
companies. Korean, Tokyo and Frankfurt exchanges listed technology IPOs in Q4. The top two
IPOs of Rocket Internet AG and Samsung SDS Co were listed in Germany and Korea
respectively, which is an aberration to the general historic trend which shows that the largest
IPOs are raised in US-based stock exchanges.
Table 2: IPO summary – Top 10 listings
Issue date
Company
Sector
Proceeds
(US$mn)
Primary
exchange
10/02/2014
11/14/2014
12/11/2014
Rocket Internet AG
Samsung SDS Co Ltd
Lending Club
Corporation/Liberty Corp
Hua Hong Semiconductor Ltd
Gumi Inc
OnDeck Capital Inc
Internet Software & Services
Software
Internet Software & Services
1,764
1,063
870
XTRA
South Korea
NYSE
Semiconductors
Software
Internet software & services
332
328
230
SEHK
Tokyo SE
NYSE
Chaozhou Three-Circle Group
Co Ltd
Momo Inc
Cnova NV
MOL Global Inc
Semiconductors
220
Shenzhen
Domicile
nation
Germany
South Korea
United
States
China
Japan
United
States
China
Internet Software & Services
Internet Software & Services
Internet Software & Services
216
188
169
NASDAQ
NASDAQ
NASDAQ
China
Netherlands
Malaysia
10/15/2014
12/18/2014
12/16/2014
12/03/2014
12/11/2014
11/20/2014
10/09/2014
Source: Dealogic with analysis by PwC.
32
Global Technology IPO Review Full-year and Q4 2014
Geographic distribution
In terms of number of IPOs, China led the way with 11 IPOs. China was followed by the US
with nine technology IPOs. But in terms of proceeds, US companies raised more than their
Chinese counterparts, US$1.7bn versus US$1.4bn, and due to the smaller number of
offerings, US companies received higher average proceeds.
European participation included Germany, with the largest tech IPO of the quarter—
US$1.8bn—the Netherlands, with US$188mn, was also in the top 10 for the quarter, followed
by the UK with US$133mn and Norway with US$107mn. Rest of the World (RoW) includes
Japan with US$328mn, Malaysia with US$188mn, New Zealand with US$96mn and South
Africa, the only African country with a tech IPO in 2014, raising US$44mn.
Figure 34: Q4 2014 Geographic distribution
2,500
18
$2,192
In US$mn
2,000
14
$1,715
12
11
1,500
9
10
$1,245
$1,435
8
1,000
Number of IPOs
16
6
3
$637
3
4
500
$229
4
4
Europe
RoW
0
2
0
United States
China
S Korea
Issue size
Australia
Number of IPOs (Right axis)
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
33
On a regional basis, Asia led with US$3.5bn in proceeds and 20 listings, followed by Europe with US$2.2bn and four listings. North
America came in third with US$1.7bn and nine listings. With the reopening of the Chinese IPO market, it is anticipated Asia will remain
a dominant force in the year ahead. However, it is encouraging to see innovation and entrepreneurialism spread across the globe, which
is a very healthy sign for the future of the technology industry.
Figure 35: Q4 2014 Regional analysis – Proceeds in US$ millions
25,000
$23,153
In US$mn
20,000
15,000
10,000
$4,141
5,000
$4,022
$2,192
$1,715
$1,562
$524
$500
$4,777
$3,903
$3,501
$58
$0
$50
$1,051
$44
0
North America
Europe
Q1 2014
Asia
Q2 2014
Q3 2014
RoW
Q4 2014
Source: Dealogic with analysis by PwC.
Figure 36: Q4 2014 Regional analysis – Number of listings
25
20
20
16
15
15
13
12
9
10
12
8
4
5
2
1
3
1
0
1
1
0
North America
Europe
Q1 2014
Q2 2014
Source: Dealogic with analysis by PwC.
34
Global Technology IPO Review Full-year and Q4 2014
Asia
Q3 2014
Q4 2014
RoW
United States
The US recorded 9 IPOs with US$1.7bn raised in Q4 2014. Year over year, the number of
listings increased by 13%, but the amount raised decreased by 49%. Quarter over quarter, the
number of listings and the amount raised increased by 350% and 227%, respectively. USdomiciled companies constituted 26% of the total 34 IPOs in Q4 2014. Two companies out of
the top 10 IPOs were domiciled in the US.
The number of US companies listing is expected to maintain momentum given the relative
strength of the US economy and the diversity of the technology ecosystem.
Figure 37: Q4 2014 US technology IPOs
4,500
18
$4,048
In US$mn
3,500
16
14
$3,395
14
12
3,000
12
9
2,500
10
8
2,000
$1,715
$1,562
1,500
8
Number of IPOs
4,000
6
1,000
4
2
500
2
$524
0
Q4 2013
Q1 2014
Total proceeds (US$mn)
Q2 2014
Q3 2014
0
Q4 2014
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
35
China
China reported 11 IPOs with US$1.4bn of proceeds. In terms of number of listings, it was 10%
higher sequentially, but declined sharply in terms of proceeds due to the Alibaba IPO in the
third quarter. Year over year, the proceeds increased by 60% and the number of listings
increased by 83%.
In contrast to prior quarters, only one Chinese company went public on a foreign exchange
(NASDAQ), but consistent with past listings, it was one of the top 10 tech IPOs of the quarter.
Figure 38: Q4 2014 Chinese technology IPOs
13
In US$mn
11
11
20,000
15
$22,968
15,000
12
9
10
6
10,000
6
5,000
3
$3,673
$899
$987
Q4 2013
Q1 2014
$1,435
0
0
Total proceeds (US$mn)
Source: Dealogic with analysis by PwC.
36
Global Technology IPO Review Full-year and Q4 2014
Q2 2014
Q3 2014
Number of deals
Q4 2014
Number of IPOs
25,000
"Coming on the heels of
Alibaba Group Holding
Ltd, Rocket Internet AG is
the largest German IPO
since 2007, clearly
demonstrating that
demand for e-commerce
stocks continues to heat up
globally and has arrived in
Europe now."
Europe
Two of the top 10 deals in the fourth quarter were European technology companies, Rocket
Internet AG of Germany (#1) and Cnova NV of the Netherlands (#9). Europe witnessed
only one IPO in the third quarter so sequentially its performance was very impressive in
terms of both number of listings and proceeds. Year-over-year proceeds jumped over
200% and listings were equal, four each in Q4’13 and Q4’14, with three of the Q4’13 listings
making the top 10.
−Werner Ballhaus
European Technology
Industry Leader, PwC
Germany
Figure 39: Q4 2014 European technology IPOs
4,500
18
$4,022
16
3,500
14
3,000
12
2,500
8
$2,192
2,000
1,500
1,000
10
8
4
4
1
$500
1
Q1 2014
Issue size
2
$59
0
Q3 2013
6
4
$704
500
Number of IPOs
In US$mn
4,000
Q2 2014
Q3 2014
0
Q4 2014
Number of IPOs (Right axis)
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
37
All other geographies
The last few quarters have seen better global participation in the technology IPO market.
US$7.5bn was raised in 2014 from technology companies outside the US, China and Europe.
Q4 2014 saw participation from companies in Australia, Japan, Malaysia, New Zealand, South
Africa and South Korea. Three of the top 10 IPOs were from other geographies, and 50% of the
top 10 IPOs were from countries other than the US and China.
Figure 40: Q4 2014 All other geographies technology IPOs
4,000
16
$3,790
14
3,000
10
2,500
2,000
10
$2,110
7
5
1,500
1,000
500
5
2
8
6
4
$1,235
$592
2
$372
0
0
Q3 2013
Q1 2014
Issue size
Source: Dealogic with analysis by PwC.
38
12
Global Technology IPO Review Full-year and Q4 2014
Q2 2014
Q3 2014
Number of IPOs (Right axis)
Q4 2014
Number of IPOs
In US$mn
3,500
Subsector distribution
The Q4 2014 technology IPO subsector distribution was more in line with historical trends.
Internet Software & Services led the way with 51% of the total proceeds and 29% of the total
number of IPOs. Most of the big-ticket IPOs were from this subsector and many were in the
top 10.
Internet Software & services was followed by the Software subsector with 32% of the total
proceeds but 38% of the number of IPOs listed this quarter.
The Semiconductor subsector came in third, with 10% of the amount raised and 12% of the
listings. The resurgence of Chinese technology companies responding to the reopening of the
China IPO market has driven Semiconductor subsector IPOs in Q4 2014.
Communication Equipment had three listings with US$334mn proceeds, followed by two
listings each for Electronics and IT Consulting & Services with US$152mn and US$106mn,
respectively.
Figure 41: Q4 2014 Subsector distribution
16
$3,772
3,500
In US$mn
3,000
14
13
12
10
2,500
10
$2,371
2,000
8
1,500
6
4
3
1,000
2
$718
500
2
Number of IPOs
4,000
4
2
$334
$152
$106
Electronics
IT Consulting &
Services
0
0
Internet Software &
Services
Software
Semiconductors
Total proceeds (US$mn)
Communications
Equipment
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
39
Stock exchange distribution
"The second half of 2014 was
a very active period for IPOs
in Australia. In particular,
PE funds crystallised
significant value from
traditional businesses that
they acquired several years
ago through moving to new
digital technology-based
business models. This
resulted in very successful
IPOs in late 2014."
In terms of amount raised, XTRA (Germany) led the way with 24% of total proceeds, but just
one listing, Rocket Internet AG, the largest Q4 2014 tech IPO. It was followed by the NYSE
with 19% of total proceeds. The NYSE's popularity in the technology sphere increased as the
operator relaxed its standards in late 2008 to allow smaller, newer companies to list.
Previously, firms needed a market value of US$750mn and a track record of profitability to list.
New rules dropped the threshold to US$150mn in market value and no operating history
before listing.5
South Korean exchanges listed three tech IPOs—Samsung SDS Co Ltd, Devsisters Corp and
Spigen Korea Co Ltd—a 17% share of proceeds. NASDAQ followed with 11% share of proceeds.
On a combined basis, Chinese stock exchanges, including Hong Kong, had a 16% share of
proceeds.
In terms of number of listings, NASDAQ led the way with seven listings, followed by the NYSE
and SEHK with five technology IPOs each. Shanghai, Australia and South Korea exchanges had
three IPOs each.
− David Wiadrowski
Technology Industry
Leader, PwC Australia
The number of stock exchanges where these 34 IPOs went public shows the slowly
changing global dynamics in the technology world. With both markets and
technology maturing across the world, companies are raising funds in a variety of
countries. It is no longer a monopoly of US and Chinese markets. There were 13 stock
exchanges supporting tech IPOs in Q4 2014.
Figure 42: Q4 2014 Stock exchange distribution
2,000
16
$1,764
1,800
14
$1,441
12
1,400
$1,245
1,000
800
8
$847
5
5
6
7
600
3
2
400
200
$753
$229
3
$133
$44
$282
NYSE
SEHK
ASX
JSE
Total proceeds (US$mn)
http://www.wsj.com/articles/SB10001424127887323894704578113183311774610
Global Technology IPO Review Full-year and Q4 2014
2
$107
1
1
1
1
0
South
Korea
Source: Dealogic with analysis by PwC.
40
$96
1
1
Nasdaq Shenzhen Shanghai
4
$328
3
$184
0
5
10
1,200
LSE
NZSE
Number of deals
OSE
TSE
XTRA
Number of IPOs
In US$mn
1,600
Table 3: Q4 2014 Stock exchanges – North America
*
Issue date
Company
Sector
Proceeds
(US$ mn)
Primary
exchange
10/03/2014
10/09/2014
10/10/2014
11/06/2014
11/20/2014
12/11/2014
Yodlee Inc
MOL Global Inc
HubSpot Inc
Upland Software Inc
Cnova NV
LendingClub Corporation/
Liberty Corp
Momo Inc
New Relic Inc
Workiva Inc
Hortonworks Inc
Connecture Inc
OnDeck Capital Inc
Software
Internet Software & Services
Software
Software
Internet Software & Services
Internet Software & Services
75
169
125
46
188
870
NASDAQ
NASDAQ
NYSE
NASDAQ
NASDAQ
NYSE
Domicile
nation
United States
Malaysia
United States
United States
Netherlands
United States
Internet Software & Services
Software
Software
Software
Internet Software & Services
Internet Software & Services
216
115
101
100
53
230
NASDAQ
NYSE
NYSE
NASDAQ
NASDAQ
NYSE
China
United States
United States
United States
United States
United States
12/11/2014
12/12/2014
12/12/2014
12/12/2014
12/12/2014
12/16/2014
Source: Dealogic with analysis by PwC.
* Deals have been classified based on the exchange where capital was raised.
Table 4: Q4 2014 Stock exchanges – Asia*
Issue date
Company
Sector
10/06/2014
10/15/2014
10/31/2014
11/05/2014
11/06/2014
DEVSISTERS Corp
Hua Hong Semiconductor Ltd
Jiangsu Pacific Quartz Co Ltd
Spigen Korea Co Ltd
Sugon Info Ind Co Ltd/Dawning
Information Industry Co Ltd
Citadel Group Ltd
Samsung SDS Co Ltd
Orion Health Group Ltd
Q Technology (Group) Co Ltd
Chaozhou Three-Circle Group Co
Ltd
Tianjin Keyvia Electric Co Ltd
Feiyu Technology
Aconex Ltd
Yangtze Optical Fibre And Cable
Joint Stock Limited Company
Surfstitch Group Ltd
Gumi Inc
Linekong Interactive Co Ltd
Linewell Software Co Ltd
11/12/2014
11/14/2014
11/26/2014
12/02/2014
12/03/2014
12/04/2014
12/05/2014
12/09/2014
12/10/2014
12/16/2014
12/18/2014
12/30/2014
12/30/2014
Primary
exchange
KOSDAQ
SEHK
Shanghai
KOSDAQ
SSE
Domicile nation
Software
Semiconductors
Semiconductors
Communications Equipment
IT Consulting & Services
Proceeds
(US$ mn)
133
332
59
49
65
IT Consulting & Services
Software
Software
Electronics
Semiconductors
41
1,063
96
90
220
ASX
KRX
NZSE
SEHK
Shenzhen
Australia
South Korea
New Zealand
China
China
Electronics
Software
Internet Software & Services
Communications Equipment
62
85
117
152
Shenzhen
SEHK
ASX
SEHK
China
China
Australia
China
Internet Software & Services
Software
Internet Software & Services
Software
71
328
93
60
ASX
Tokyo SE
SEHK
SHA
Australia
Japan
China
China
South Korea
China
China
South Korea
China
Source: Dealogic with analysis by PwC.
* Deals have been classified based on the exchange where capital was raised.
Global Technology IPO Review Full-year and Q4 2014
41
Table 5: Q4 2014 Stock exchanges – Europe*
Issue date
Company
Sector
10/02/2014
10/02/2014
10/10/2014
Rocket Internet AG
Scatec Solar ASA
Gamma Communications Plc
Internet Software & Services
Semiconductors
Communications Equipment
Proceeds
(US$ mn)
1,764
107
133
Primary
exchange
XTRA
OSE
London
Stock
Exchange
AIM
Domicile nation
Proceeds
(US$ mn)
44
Primary
exchange
JSE
Domicile nation
Germany
Norway
United Kingdom
Source: Dealogic with analysis by PwC.
* Deals have been classified based on the exchange where capital was raised.
Table 6: Q4 2014 Stock exchanges – Other*
Issue date
Company
Sector
12/22/2014
Cartrack Holdings Limited
Software
Source: Dealogic with analysis by PwC.
* Deals have been classified based on the exchange where capital was raised.
42
Global Technology IPO Review Full-year and Q4 2014
South Africa
Cross-border listings
In contrast to the second and third quarters of 2014, just three of the 34 listings were crossborder IPOs in Q4. In the prior quarter, 33% of the listings were cross-border compared to
only 9% in Q4. Reopening of the Chinese IPO market coupled with renewed interest and vigor
in European and other Asian countries for emerging technology companies, may point to Q4
activity being more typical than what we’ve seen the past couple of years.
The three companies to list cross-border in Q4 were CNova NV from the Netherlands, MOL
Global, a Malaysia-based company and Momo Inc, a Chinese company, all of which listed on
NASDAQ.
Figure 43: Q4 2014 Cross-border listings
45
40
28%
11
35
9%
3
30
1
4%
25
33%
20
15
10
25
6
29
31
12
5
0
Q1 2014
Q2 2014
Domestic deals
Q3 2014
Q4 2014
Cross-border deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
43
Key financials
Figure 44: Q4 2014 and full-year 2014 Technology IPOs – Net income
Q4 2014
47%
53%
Positive net income
Negative net income
Full-year 2014
39%
61%
Positive net income
Negative net income
Source: Dealogic with analysis by PwC.
The average Last Twelve Months (LTM) net income for Q4 2014 was US$14.2mn, with 53%
of the companies reporting a positive net income. Samsung SDS Co Ltd reported the highest
net income of US$330.3mn, followed by Rocket Internet AG which reported net income of
US$190.7mn. Hortonworks Inc, a major Software company, reported the highest net loss of
US$10.7.7mn, followed by Linekong Interactive Co. Ltd, an Internet Software & Services
company, reporting a net loss of US$62.1mn.
44
Global Technology IPO Review Full-year and Q4 2014
In terms of full-year 2014, the percentage of companies with positive net income was much
better than Q4 2014 with 61% declaring positive LTM net income. The overall improved net
income situation among tech IPO companies was due to the profitability of several of this
year’s global tech IPO class.
There is one trend that clearly stands out—investors are growing more tolerant of tech
companies going public with net loss. Previously, fewer companies with net losses filed.
Looking at the last quarter vis-à-vis the full year, we see that 47% of the newly listed
companies in Q4 2014 had net losses versus 39% for the whole year.
In terms of average revenue for the quarter, the Software subsector reported the highest
average revenue of US$664.2mn with 13 companies listing this quarter. Communications
Equipment companies, with US$561.7mn average revenue, were next, followed by Internet
Software & Services with average revenue of US$469.4mn.
The Semiconductor subsector reported the highest average EBITDA of US$87.3mn, followed
by the Communications Equipment subsector with US$66.9mn. Coming in third was the
Software subsector with US$6.7mn, but its average was skewed by Samsung SDS Co Ltd. The
revival of Chinese companies in the IPO market has led to positive momentum in the
Semiconductor subsector.
In contrast to historical trends, the top two subsectors with the highest average net income
were both hardware-oriented—Semiconductor and Communications Equipment—with
US$49.7mn and US$41.6mn, respectively. As these subsectors are more capex-intensive, it
generally takes longer for these companies to achieve positive net income.
The average enterprise value of the Software subsector was the highest at US$2.3bn, followed
by the Internet Software & Services subsector at US$2.0bn. Recent US tech IPOs have been in
the Software and Internet Services subsectors. The booming US markets coupled with pre-IPO
VC and PE investments led to extremely high valuations for companies in these two subsectors
across the world.
Figure 45: Q4 2014 – Average LTM revenue
$664
700
35
34
500
30
$562
$490
$469
400
25
20
$276
300
10
200
15
$175
$214
10
13
4
100
2
3
5
0
Internet Software
& Services
Software
Number of IPOs
In US$mn
600
Semiconductors
LTM revenue
IT Consulting &
Services
Communications
Equipment
2
Electronics
0
All sectors
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
45
Figure 46: Q4 2014 – Average LTM EBITDA
100
35
$87
34
$67
In US$mn
$64
25
60
20
$42
40
$27
20
15
10
$12
13
Number of IPOs
30
80
10
3
0
5
2
4
-$7
2
(20)
Internet Software
& Services
Software
Semiconductors
IT Consulting &
Services
LTM EBITDA
Communications
Equipment
Electronics
0
All sectors
Number of deals
Source: Dealogic with analysis by PwC.
Figure 47: Q4 2014 – Average LTM net income
60
35
34
$50
50
30
40
25
30
20
$23
13
20
$14
10
10
$10
15
10
$10
3
0
-$1
4
5
2
(10)
Software
Semiconductors
LTM net income
Source: Dealogic with analysis by PwC.
46
0
2
Internet Software
& Services
Global Technology IPO Review Full-year and Q4 2014
IT Consulting &
Services
Communications
Equipment
Number of deals
Electronics
All sectors
Number of IPOs
In US$mn
$42
Figure 48: Q4 2014 – Average total debt
450
35
$420
34
400
30
25
300
20
250
200
$186
13
$173
$168
10
150
$97
100
50
3
5
2
4
0
Internet Software
& Services
Software
10
$86
2
$12
Semiconductors
15
Number of IPOs
In US$mn
350
0
IT Consulting &
Services
LTM debt
Communications
Equipment
Electronics
All sectors
Number of deals
Source: Dealogic with analysis by PwC.
Figure 49: Q4 2014 – Average enterprise value
35
$2,278
34
$2,047
30
2,000
In US$mn
$1,792
25
$1,409
1,500
20
$1,147
1,000
13
15
10
500
2
$558
$498
3
2
Communications
Equipment
Electronics
Number of IPOs
2,500
10
5
4
0
0
Internet Software
& Services
Software
Semiconductors
Enterprise value
IT Consulting &
Services
All sectors
Number of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
47
Valuation metrics
The technology industry is undergoing an upward valuation shift with more positive investor
sentiment towards the sector. Leading the valuation story are major Internet Software &
Services companies that are listing with overly high valuations, based on rapid revenue
growth but without a positive bottom line. Pre-IPO funding has also changed the market
dynamics with easy money being available from VCs and PEs and even hedge funds coming
into the fray.
The average EV/LTM revenue for all the companies in Q4 2014 was 3.7x, which is in line with
other industries. Leading the multiple metrics was the IT Consulting & Services subsector
with 5.4x, followed by the Semiconductor and Internet Software & Services subsectors with
5.1x and 4.4x, respectively. Communications Equipment had the lowest multiple of 1.1x.
IT Consulting & Services reported the highest EV/LTM EBITDA multiple of 94.4x, followed
by the Software subsector with 35.8x. The average industry multiple overall was 43.1x.
Communications Equipment had the lowest multiple of 8.3x.
Figure 50: Q4 2014 EV/LTM revenue
6 .0 x
34
5.4 x
5.1 x
35
30
5 .0 x
4.4 x
25
3.7 x
3.4 x
20
2.8 x
3 .0 x
13
2 .0 x
15
10
10
1.0 x
1 .0 x
2
3
2
IT Consulting &
Services
Communications
Equipment
Electronics
4
0 .0 x
Internet Software
& Services
Software
0
Semiconductors
EV/LTM revenue
Source: Dealogic with analysis by PwC.
48
5
Global Technology IPO Review Full-year and Q4 2014
No. of deals
All sectors
Number of IPOs
In US$mn
4 .0 x
Figure 51: Q4 2014 EV/LTM EBITDA
94.4 x
100 .0 x
34
90 .0 x
35
30
80 .0 x
In US$mn
60 .0 x
20
50 .0 x
40 .0 x
43.1 x
35.8 x
15
10
30 .0 x
13
10
18.3 x
16.1 x
20 .0 x
8.3 x
2
10 .0 x
4
Internet Software
& Services
Software
Semiconductors
5
2
3
0 .0 x
IT Consulting &
Services
EV/LTM EBITDA
Communications
Equipment
Number of IPOs
25
70 .0 x
0
Electronics
All sectors
No. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
49
Top three subsectors in Q4 2014
Internet Software & Services
In terms of average revenue, Internet Software & Services was relatively flat year over year in
the fourth quarter, but dipped sharply by 77% quarter over quarter. This drop resulted from
the two big ticket IPOs in Q3—Alibaba and Travelport Worldwide—which had reported high
revenue.
LTM EBITDA and net income are all in the negative in Q4 2014, compared to US$896mn and
US$828mn, respectively, last quarter and US$77mn and US$13mn in Q4 2013.
Average debt levels increased sharply by US$420mn year over year by more than 200%, but
dropped compared to the last quarter.
EV/LTM revenue (4.4.x) was down by 63% year-on-year and by 80% compared to the last
quarter in Q4 2014.
Figure 52: Internet Software & Services – LTM revenue
2,500
25
$2,066
2,000
20
1,500
15
12
1,000
6
10
$866
10
11
6
$468
$469
$383
500
5
$118
0
0
Q3 2013
Q4 2013
Q1 2014
LTM revenue
Source: Dealogic with analysis by PwC.
50
Global Technology IPO Review Full-year and Q4 2014
Q2 2014
Total no. of deals
Q3 2014
Q4 2014
Number of IPOs
In US$mn
20
Figure 53: Internet Software & Services – LTM EBITDA
1,000
25
$896
20
20
600
15
12
400
200
11
$77
10
10
Number of IPOs
In US$ mn
800
6
$66
6
0
($8)
5
($7)
($18)
(200)
0
Q3 2013
Q4 2013
Q1 2014
LTM EBITDA
Q2 2014
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 54: Internet Software & Services – LTM net income
900
25
$828
800
20
20
600
500
15
12
400
300
200
11
10
6
$13
100
6
5
$39
0
(100)
10
Number of IPOs
In US$ mn
700
($14)
Q3 2013
($1)
($34)
Q4 2013
Q1 2014
LTM net income
0
Q2 2014
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
51
Figure 55: Internet Software & Services – Enterprise value
50,000
25
$44,873
20
In US$ mn
40,000
20
35,000
30,000
15
12
25,000
20,000
15,000
11
10
6
$5,516
6
10,000
5,000
10
Number of IPOs
45,000
$3,457
$1,058
5
$2,047
$1,406
0
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Enterprise value
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 56: Internet Software & Services – Total debt
20
2,000
In US$ mn
25
$2,296
20
1,500
15
12
1,000
11
10
10
6
500
6
$127
$78
$38
Q1 2014
Q2 2014
$9
$420
0
0
Q3 2013
Q4 2013
Total debt
Source: Dealogic with analysis by PwC.
52
5
Global Technology IPO Review Full-year and Q4 2014
Q3 2014
Total no. of deals
Q4 2014
Number of IPOs
2,500
Figure 57: Internet Software & Services – EV/LTM revenue
25
25
21.7x
20
20
11.8x
15
15
12
10
11
8.9x
10
10
Number of IPOs
In US$ mn
20
6
5
3.7x
6
4.0x
4.4x
5
0
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
EV/LTM revenue
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 58: Internet Software & Services – EV/LTM EBITDA
80
25
71.96x
70
20
50.06x
50
15
12
40
11
30
6
10
10
Number of IPOs
In US$ mn
20
60
21.17x
20
6
5
10
0
0.00x
0.00x
Q3 2013
Q4 2013
Q1 2014
EV/LTM EBITDA
0.00x
Q2 2014
Q3 2014
0
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
53
Software
Fourth quarter average revenue of US$664mn increased sharply sequentially (600%) and by
130% year over year. Compared to the last five quarters, the Software subsector reported its
best performance, with the highest number of IPOs (13) in Q4 2014.
The average EBITDA and net income increased sharply quarter over quarter due to a very low
average EBITDA and net income in Q3 2014. The average EBITDA and net income of
US$64mn and US$10mn in Q4 2014 dropped by 20% and 147% year over year.
Average EV was flat quarter over quarter but dropped by 33% year over year to US$2.2bn
from US$3.3bn. For the Software subsector, the debt levels were traditionally low and the
average debt has dipped further in the last two quarters. Ab influx of funding has also
positively contributed to keeping debt low; year over year, debt levels decreased by 93%.
The valuation multiples of EV/LTM revenue (3.4x) and EV/LTM EBITDA (35.8x) decreased
by 70.7% and 15.5%, respectively, compared to the last year, and by 87% and 86%
sequentially.
Figure 59: Software – LTM revenue
700
14
$664
13
$554
12
11
500
10
400
8
$290
5
300
6
6
5
200
4
2
100
$92
$79
2
$65
0
0
Q3 2013
Q4 2013
Q1 2014
LTM revenue
Source: Dealogic with analysis by PwC.
54
Global Technology IPO Review Full-year and Q4 2014
Q2 2014
Q3 2014
Total no. of deals
Q4 2014
Number of IPOs
In US$ mn
600
Figure 60: Software – LTM EBITDA
120
14
13
96
100
12
In US$ mn
80
10
64
60
8
40
9
58
0
6
6
5
20
Number of IPOs
11
80
4
2
2
(20)
(25)
(40)
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
LTM EBITDA
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 61: Software – LTM net income
20
14
10
10
0
0
12
5
6
In US$ mn
13
8
(10)
(20)
2
(21)
6
6
5
5
4
(30)
(40)
Number of IPOs
11
10
2
(36)
Q3 2013
0
Q4 2013
Q1 2014
LTM net income
Q2 2014
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
55
Figure 62: Software – Enterprise value
14
$3,391
In US$ mn
13
11
3,500
12
3,000
2,500
10
$2,500
$2,352
$2,158
$2,278
8
2,000
6
6
5
1,500
5
1,000
Number of IPOs
4,000
4
2
$509
500
2
0
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Enterprise value
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
400
$374
350
11
14
13
12
300
10
250
8
$169
200
6
6
5
150
5
100
4
2
2
50
$17
Q3 2013
Q4 2013
Q1 2014
Total debt
Source: Dealogic with analysis by PwC.
56
$3
$12
Q3 2014
Q4 2014
$5
0
Global Technology IPO Review Full-year and Q4 2014
0
Q2 2014
Total no. of deals
Number of IPOs
In US$ mn
Figure 63: Software – Total debt
Figure 64: Software – EV/LTM revenue
35
14
31.7x
12
25.5x
25
10
20
8
11.7x
5
15
6
6
5
7.8x
10
2
4
3.9x
5
Number of IPOs
In US$ mn
13
11
30
2
3.4x
0
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
EV/LTM revenue
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 65: Software – EV/LTM EBITDA
300
14
13
12
In US$ mn
10
200
8
150
100
5
62.1x
2
4
42.3x
50
35.8x
22.5x
0
6
6
5
0.0x
Q3 2013
Number of IPOs
258.0x
11
250
2
0
Q4 2013
Q1 2014
EV/LTM EBITDA
Q2 2014
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
57
Semiconductor
The Semiconductor subsector saw a more than 200% rise in average revenue compared to the
last quarter, but dropped by 82% year over year. Average EBITDA also increased by more
than 200% quarter over quarter. The resurgence of the Chinese IPO market and easing of
policies have had a positive impact on the Semiconductor subsector which saw 12 IPOs in
2014 compared to four in 2013.
The average EV also jumped by more than 100% quarter over quarter, but it was still more
fundamentally driven, and the EV multiples were reasonable and in line with industry
standards of EV/revenue and EV/EBITDA of 5.1x and 16.2x, respectively. Both these
valuation multiples were lower than the last quarter.
Figure 66: Semiconductor – LTM revenue
1,800
5
$1,561
4
In US$ mn
1,400
4
4
1,200
3
$655
1,000
2
2
800
2
Number of IPOs
1,600
2
600
1
400
1
$276
200
$90
$87
$67
0
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
LTM revenue
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 67: Semiconductor – LTM EBITDA
150
5
50
$87
$68
4
$22
$26
$25
4
0
3
(50)
2
2
2
(100)
(150)
4
2
1
1
(200)
($195)
(250)
0
Q3 2013
Q4 2013
Q1 2014
LTM EBITDA
Source: Dealogic with analysis by PwC.
58
Global Technology IPO Review Full-year and Q4 2014
Q2 2014
Q3 2014
Total no. of deals
Q4 2014
Number of IPOs
In US$ mn
100
Figure 68: Semiconductor – LTM net income
100
5
$15
$19
0
4
In US$ mn
($7)
4
4
(100)
3
(200)
2
2
2
Number of IPOs
$19
$50
2
(300)
1
1
(400)
($447)
(500)
0
Q3 2013
Q4 2013
Q1 2014
Q2 2014
LTM net income
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 69: Semiconductor – Enterprise value
3,500
5
$2,991
In US$ mn
4
4
4
2,500
3
2,000
1,000
500
2
2
1,500
$1,409
2
$859
1
$799
$682
2
Number of IPOs
3,000
1
$382
0
0
Q3 2013
Q4 2013
Q1 2014
Enterprise value
Q2 2014
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
59
Figure 70: Semiconductor – Total debt
2,000
5
$1,827
In US$ mn
1,600
4
4
4
1,400
1,200
3
1,000
2
2
800
600
2
2
1
400
1
$186
200
0
Number of IPOs
1,800
$6
$6
$0
Q1 2014
Q2 2014
Q3 2014
$0
Q3 2013
Q4 2013
Total debt
0
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Figure 71: Semiconductor – EV/LTM revenue
14
5
12.80x
12
10
7.90x
8
3
2
4.30x
1
2
1
1.90x
2
1.20x
0
0
Q3 2013
Q4 2013
Q1 2014
EV/LTM revenue
Source: Dealogic with analysis by PwC.
60
4
2
2
6
4
4
9.70x
Global Technology IPO Review Full-year and Q4 2014
Q2 2014
Q3 2014
Total no. of deals
Q4 2014
Number of IPOs
In US$ mn
4
Figure 72: Semiconductor – EV/LTM EBITDA
40
5
35.01x
4
4
25.80x
26.40x
30
25
20
3
17.10x
2
2
2
15
10
4
2
Number of IPOs
In US$ mn
35
11.70x
1
1
5
0.00x
0
Q3 2013
Q4 2013
0
Q1 2014
EV/LTM EBITDA
Q2 2014
Q3 2014
Q4 2014
Total no. of deals
Source: Dealogic with analysis by PwC.
Global Technology IPO Review Full-year and Q4 2014
61
Methodology
The Global Technology IPO Review for Q4 and full-year 2014 is based on PwC’s analysis
of transaction data extracted from Dealogic. The analysis considers IPOs across all
countries worldwide during the period 1 October 2014 to 31 December 2014 (Q4), 1
January 2014 to 31 December 2014 (full-year) and from 2010-2014. Financial data was
also obtained from Dealogic.
The definition of the Technology sector is based on the Dealogic database industry
classifications and includes the following subsectors:






Internet Software & Services
IT Consulting & Services
Professional Services (e.g., Application Software, Software Solutions)
Semiconductors
Software
Computer Storage & Peripherals
–
–


Computer, Computer Peripheral Equipment
Computer Storage Device Manufacturing
Electronic Computer Manufacturing
Communications Equipment
Only IPOs with issue size greater than US$40mn were included in the analysis.
All monetary amounts are in US dollars unless otherwise indicated.
mn – millions
bn - billions
LTM – Last twelve months
* Figures are rounded
62
Global Technology IPO Review Full-year and Q4 2014
Contacts
For more information
If you would like to discuss how these findings might impact your business or your
future strategy, please reach out to any of our technology industry leaders listed below.
Raman Chitkara
Global Technology Leader
Phone: 1 408 817 3746
Email: raman.chitkara@us.pwc.com
Rod Dring – Australia
Phone: 61 2 8266 7865
Email: rod.dring@au.pwc.com
Hoonsoo Yoon – Korea
Phone: 82 2 709 0201
Email: hoonsoo.yoon@kr.pwc.com
Estela Vieira – Brazil
Phone: 55 1 3674 3802
Email: estela.vieira@br.pwc.com
Ilja Linnemeijer – The Netherlands
Phone: 31 88 792 4956
Email: ilja.linnemeijer@nl.pwc.com
Christopher Dulny – Canada
Phone: 1 416 869 2355
Email: christopher.dulny@ca.pwc.com
Yury Pukha – Russia
Phone: 7 495 223 5177
Email: yury.pukha@ru.pwc.com
Jianbin Gao – China
Phone: 86 21 2323 3362
Email: gao.jianbin@cn.pwc.com
Greg Unsworth – Singapore
Phone: 65 6236 3738
Email: greg.unsworth@sg.pwc.com
Pierre Marty – France
Phone: 33 1 5657 58 15
Email: pierre.marty@fr.pwc.com
Philip Shepherd – UAE
Phone: 97 1 43043501
Email: philip.shepherd@ae.pwc.com
Werner Ballhaus – Germany
Phone: 49 211 981 5848
Email: werner.ballhaus@de.pwc.com
Jass Sarai – UK
Phone: 44 0 1895 52 2206
Email: jass.sarai@uk.pwc.com
Sandeep Ladda – India
Phone: 91 22 6689 1444
Email: sandeep.ladda@in.pwc.com
Pierre-Alain Sur – US
Phone: 1 646 471 6973
Email: pierre-alain.sur@us.pwc.com
Masahiro Ozaki – Japan
Phone: 81 3 5326 9090
Email: masahiro.ozaki@jp.pwc.com
Alan Jones - US (Deals Partner)
Phone: 1 415 498 7398
Email: alan.jones@us.pwc.com
Global Technology IPO Review Full-year and Q4 2014
63
About PwC’s Technology Institute
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first-hand experiences working in and with the technology industry.
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Global Technology IPO Review Full-year and Q4 2014
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