Weekly Update #250: EZ VC-Backed Index Update

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Weekly Update

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Hello Investors,

 

With the flurry of IPO activity YTD, we take a look at VC-backed IPO performance with our EZ IPO Index. As a reminder, the index is an equal-weighted index composed of over 100 VC-backed companies that have IPO’ed since 2013.


Year-to-date, formerly VC-backed companies have posted strong performance. Our index is up over 15% since Jan 1, 2018. This compares to a modest increase for the NASDAQ-100 (equal-weighted) and flattish performance for the S&P 500 (equal-weighted). The strongest components of the EZ index YTD has been the 2015 IPO vintage (incl. SQ, RPD, TEAM, ETSY and SHOP). 2018 IPOs have contributed positively as well, up 37% from their IPO prices, on average.


Historical Performance: EZ VC-Backed IPO Index vs. NASDAQ-100, S&P 500

Source: Ycharts, EquityZen estimates


YTD Returns: EZ VC-Backed IPO Index vs. NASDAQ-100, S&P 500

Source: Ycharts, EquityZen estimates


Where do we go from here? SaaS multiples remain elevated versus their historical average, which provides a supportive backdrop for additional VC-backed IPO activity, in our view (a meaningful number of VC-backed companies are SaaS providers). For further details on our IPO predictions for the balance of the year, stay tuned for an update of our 2018 IPO outlook later this week.


SaaS Forward P/S Multiples

Source: Ycharts, EquityZen estimates


Other items we are reading this week:


Thanks,
Catherine Klinchuch
Finance & Research Lead, EquityZen

 

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Invest in Mesosphere 
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