US Venture IPOs Hit A Two-Year Low In Q1

The number of venture-capital-backed IPOs plunged in Q1 2015 to the lowest level in two years, in the wake of a huge number of VC-backed companies that went public in 2014, a VC trade group said on Monday (April 6).

The National Venture Capital Association (NVCA) counted 17 IPOs that raised a total of $1.4 billion in the first three months of 2015. That’s less than half the pace of Q1 2014, when 37 VC-backed startups went public to raise a total of $3.4 billion.

The Q1 2015 IPOs were also smaller, with an average amount raised of $84.3 million. That’s the smallest average IPO offer amount since at least 2010. (NVCA and Thomson Reuters, which reported the numbers, didn’t provide any historical data earlier than 2010.)

The numbers also showed that the January-through-March period was the first time fewer than 20 startups went public since Q1 of 2013, when only eight companies made the jump.

“With such a blistering pace for venture-backed exit activity in 2014, it was only a matter of time before we saw a drop in activity,” NVCA CEO Bobby Franklin said in a prepared statement, adding that 54 venture-backed companies have already filed publicly for IPOs, and “many more confidential registrations” are already in place for later in 2015. Those confidential registrations have been filed under the JOBS Act, where the majority of venture-backed companies now file, according to NVCA.

Among companies that went public in Q1, 13 of the 17 were in the medical and biotech sectors, although the biggest IPO of the quarter belonged to Box, the cloud-services company that raised $201 million and began trading on the NYSE on Jan. 22. While 13 of the 17 were U.S.-based companies, the quarter’s largest IPO by a non-U.S. company was Israel-based Solaredge Technologies’ $145 million NASDAQ launch on March 25.

Twelve of the companies listed on the NASDAQ, four on the NYSE and one over-the-counter. And nine of the 17 — just under half — are currently trading at or above their offering price.

Outside the stock markets, the number of mergers and acquisitions by venture-backed companies was also down from a year ago, but not by as much, with 86 mergers and acquisitions in Q1 2015 compared with 115 a year earlier. Only 16 of the 86 reported deal size, with an average of $128.1 million, down from $245.8 million in Q1 2014.