The number of companies going public on United States exchanges amounted to 33 in the fourth quarter, which represented a 6.5% uptick from the year-ago quarter (31 IPOs). Despite the increase, this number was still well below the average fourth quarter IPO count going back to 2000 (47 IPOs). The Q4 amount represented a decrease from the 35 companies that went public during Q3. On an annual basis, there were 106 companies that went public on U.S. exchanges in 2016, which was a 35.4% downtick from 2015 (164 IPOs). The number of initial public offerings in 2016 marked the lowest annual count since 2009, when the number was 64.
Gross proceeds (including over-allotment) from initial public offerings decreased 7.3% year-over-year in Q4 to $7.1 billion. This value was 44% below the average fourth quarter gross proceed total going back to 2000 ($12.7 billion). On an annual basis, gross proceeds from IPOs during 2016 amounted to $20.2 billion, which was a 38.1% decline from 2015. It marked the smallest annual total since 2002, when gross proceeds were $19.5 billion.
Only 13 Venture Capital-Backed Tech IPOs in 2016
Venture capital-backed technology initial public offerings have always been a closely watched section of the IPO market. It hit its peak back in 2000, when 93 of these IPO types occurred. During 2016, there were only 13 VC-backed initial public offerings in the Technology Services and Electronic Technology sectors. This marked the lowest annual count since 2009, when there were just four. Despite the low number, these types of offerings have performed well this year and could provide some momentum for the market moving forward.
Acacia Communications and Impinj are Top Performing IPOs
Ten of the 13 VC-backed tech IPOs this year were in the positive through December 23. The only companies that have declined in value over this time period were SecureWorks, China Online Education Group, and Everspin Technologies. The average price performance of these 13 offerings from the offer price through December 23 was 57.4%, with three of the companies gaining over 100%. Optical networking technology company, Acacia Communications, and radio-frequency identification software firm, Impinj, led performance for the year, with price returns of 185.6% and 176.1%, respectively. These two stocks were also the top performers among all companies going public on U.S. exchanges this year.
Health Technology Sector Leads Q4 IPO Volume for 12th Consecutive Quarter
Of the 33 initial public offerings in the fourth quarter, 9 came from the Health Technology sector, which was the highest representation of any group. The fourth quarter marked the 12th consecutive quarter that the Health Technology group led all FactSet sectors in IPO volume. The Electronic Technology sector came in second with four IPOs during the quarter. On an annual basis, there were 39 initial public offerings in the Health Technology sector, which represented 37% of all IPOs for the year. This marked a decrease from the percentage in 2015 (46%), but an increase from the percentage in 2014 (36%).
During 2016, 21 out of the 39 offerings came from the Biotechnology industry and 13 were from the Major Pharmaceuticals industry. The Finance and Technology Services sectors placed second and third in terms of annual IPO volume (15 and 12 IPOs, respectively).