Explore Our Knowledge Center

EquityZen has curated this list of quality resources for secondary investors, shareholders and company representatives.
Have additional questions? We'd love to hear from you.

EquityZen's 2018 Tech IPO Recap

Tech IPO2018 IPO2019 IPONew IPOsIPO
...show more tags

Adam Augusiak-Boro   January 17, 2019

2018 will be remembered as the year during which markets reached all-time highs (particularly tech stocks), and also as the worst year for stocks since the last financial crisis began in 2008. Last year we saw two American tech companies surpass $1 trillion in market cap—Apple and Amazon—only to proceed to lose over $300 billion in value each in a matter of months.

Despite a bit of a recovery at the end of the year, 2018 still finished with the Dow, S&P 500 and Nasdaq lower by 5.6%6.2% and 4%, respectively. Last year’s IPO market mimicked much of 2018’s volatility, with certain issuers weathering the storm and others bringing investors steep losses.

So how was 2018’s IPO performance? 

We break down last year’s tech IPOs below using information sourced from Crunchbase. Please note we excluded four issuers from our analysis that listed their shares through American depositary receipts (ADR).

Last year, nearly 45 tech companies debuted on U.S. exchanges, selling approximately $28 billion of company shares (note this includes Spotify’s direct listing, which resulted in over $9 billion going to prior Spotify shareholders instead of the company’s balance sheet). The average company raised nearly $650 million while the median amount raised was only $214 million, indicating there were a significant number of large IPOs.

So, which were the largest IPOs of 2018…

…and which sectors attracted the most public markets capital?

*Excludes Spotify’s direct listing
**Includes only 1 company in each of the following sectors: AdTech, Automotive, Car Sharing, Energy, Insurance, IoT, and Software Outsourcing

While Chinese and American companies dominated the IPO markets in 2018, with four companies each in the top 10 tech IPOs, Brazilian fintech company PagSeguro raised the most capital of any company. Although it didn’t actually raise any capital in its direct listing, Sweden’s Spotify sold by far the most equity, with existing shareholders dumping over $9 billion worth of stock onto the NYSE. Perhaps unsurprisingly, Media & Entertainment received the most public markets funding last year, even without counting Spotify’s IPO. Chinese music streaming giant Tencent Music raised over $1 billion in its IPO, while another Chinese entertainment company, IQIYI, raised $2.3 billion to support its television and movie portal. Closely following Media & Entertainment were the FinTech, SaaS and eCommerce sectors.

A lot of money was raised, but how have 2018’s IPOs performed? Some have performed quite well…

…others, not so much.

2018 brought a mixed bag for the markets overall, and much of the same can be said about the top tech IPO winners and losers. Several companies have continued to perform strongly, posting 20% - 40%+ gains through yesterday. Of the nearly 45 tech companies that went public last year, 19 have generated positive returns. That, of course, implies that the majority of 2018 tech IPOs continue to have negative performance, some as high as (50%+). On the bright side, so far in Q1 2019, almost 40 of these companies are in the black with an average YTD gain of approximately 15%.

So what will 2019 bring?

As we look ahead to 2019, we’re reminded that 2018 was a year much like any other in terms of investing performance.

Some investments have performed poorly while others have performed well. For example, while unicorn IPOs from ADT (down 43% from IPO) and Dropbox (down 22% from IPO) have been followed by less than stellar market performance, companies like Zscaler (up 34% from IPO) and Eventbrite (up 36% from IPO) continue to provide strong returns to investors. As far as recent market performance is concerned, only time will tell if we’re at the beginning of a sustained downturn—but until then, we’re trying not to let recent market volatility cloud the big picture. Many tech companies continue to perform strongly, and as we kick off 2019, we still expect some blockbuster tech IPOs this year. For our list of 2019’s IPO predictions, check out our IPO Outlook here.


2019 IPO Outlook — A Bellwether Year for the New Tech Elite?

Tech IPOIPOs2019 IPOAirbnbLyftNew IPOs
...show more tags

Adam Augusiak-Boro   November 15, 2018

As the bull market charged into its ninth year in 2018, with the FAANG tech giants (Facebook, Apple, Amazon, Netflix and Alphabet’s Google) leading U.S. equities markets to record highs, many of us thought we would have seen stronger IPO activity. However, with under two months left of 2018 and despite favorable market conditions, this year’s U.S. IPO count is still nearly 100 IPOs lower than 2014’s total of 275 priced IPOs. At EquityZen, we continue to believe that IPO volume will remain subdued compared to prior bull markets given the secular trends we see in the U.S. capital markets.

Our team at EquityZen took a closer look at the companies we believe are primed to go public in 2019. To read our full 2019 IPO Outlook, please click here.

Tech IPOs and Trump

Tech IPOTrumpIPOElection

Nat Disston   December 08, 2016

This election has not been short of surprises, and the stock market is no exception. With the Dow and S&P 500 reaching record highs on Wednesday, it seems the market has recovered from the uncertainty we had just one month ago. That said, the President-elect doesn't step into the White House for another month and a half. It's to be determined if we see another shift after January 20th once the the rubber hits the pavement.

Until then, Trump has shared (some of) his plan as president, and as he appoints his administration, the market will adjust. Based on what we know, we expect the impact to be a mixed bag for tech companies and their IPO plans during the Trump presidency. 

Positives: tax, repatriation, financial regulation
Trump is a business and deals guy, and whether that's good or bad for our President, some of his policies reflect this and the market is currently liking it. Primarily, Trump plans to lower corporate taxes from the standard 35% to 15%. This will certainly help the tech sector broadly as it will boost their bottom line. This could help smaller companies who may have been boxed out of IPOs previously due to their size hit the markets earlier in their life cycle. Larger tech companies usually have a lower effective tax rate (typically in the range of 19% to 26%, which is below the 28.6% S&P average) thanks to tax harbors by keeping cash abroad. In any case, the proposed 15% corporate tax rate is a win. Furthermore, Trump wants to bring foreign cash home to spur US jobs with a 10% tax for the repatriation of foreign cash. It's widely discussed that Apple alone has a whopping $200B in cash abroad. This move would spur hiring in the US along with M&A and R&D activity. Finally, Trump has been pretty outspoken about financial reform after the 2008 recession (Volcker rule, Dodd Frank...) and repealing parts of this would open up financial institutions to taking more risk on their balance sheet, which may include tech investments.

Negatives: trade, immigration, and health care
Sticking to his word to bring many jobs back to the US, Trump wants to place tariffs on goods made abroad to encourage US manufacturing. This will increase consumer costs and impact inflation, and ultimately hurt US companies. In return, this move could also hurt US exports to companies in countries who were impacted by the loss of US manufacturing abroad. On a related note, Trump's outspoken plans for immigration reform have a more direct impact to tech companies as it will make it harder for them to hire top talent. Google, Apple, Amazon, Oracle, Intel, and Microsoft are among the top 25 applicants for H1B visas each year. Furthermore, according to a recent study by the National Foundation for American Policy, more than 50% of private tech companies in the US valued over $1B have at least one immigrant co-founder. Lastly, Trump has a bone to pick with the Affordable Care Act (colloquially known as Obamacare). His recent appointment of Tom Price as secretary of Health and Human Services seems to reconfirm what he said on the campaign trail (for the uninitiated, Obamacare gave birth to a slew of healthcare startups that were built specifically for it). IPOs have a phobia of volatility and uncertainty, and Trump's healthcare plans are exactly that: volatile and uncertain.

In aggregate, the consensus seems to be net positive for tech companies (aside from healthcare: sorry guys), given the administration's policies toward economic growth. The big question is: how pro-technology will Trump actually be?

So what does this mean for tech IPOs under Trump?

In the 30 days since Trump's election, we have little tech IPO data to extrapolate from:
  • Pricings: 1 (a microcap)
  • Filings: 4
  • Pulled + Withdrawn: 3

However, IPO filing activity has remained steady since the election as shown in the chart below by Renaissance Capital.

We have little IPO data to analyze, but the equity markets have performed well since Trump's election, which is encouraging for any company who wants to take their company public. However, it's important to consider that the IPO market usually operates on a very case-by-case basis. Just like private companies raise money when they need it, companies seek an IPO when it's right for them - whether they need the cash for operations or liquidity for their shareholders. There's often an added strategic element such as getting out ahead of competitors (like HortonWorks did ahead of Cloudera and MapR), or waiting for regulatory issues to conclude (see: Uber and Airbnb). In the current market, if a company wants to IPO, it is probably a good time to continue on that path. One thing the IPO market doesn't like is volatility, so we may see another market shift from election day once the Trump administration takes the wheel January 20th and changes direction.
Have questions?