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SVB State of the Markets Q2 2018

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Silicon Valley Bank's quarterly State of the Markets report breaks down the financial trends that are shaping the global innovation economy.

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SVB State of the Markets Q2 2018

  1. 1. State of the Markets Inside views on the health and productivity of the innovation economy Second Quarter 2018
  2. 2. State of the Markets: Second Quarter 2018 State of the Markets 2 4 Macro Snapshot: Long-Lived Bull Market 7 IPO Conditions: Value in the Face of Volatility 12 Late Stage: Another Round of Mega-Rounds 17 Global Perspective: Tension Over Tech 22 Special Report: Prepared for a Downturn?
  3. 3. State of the Markets 3 State of the Markets: Second Quarter 2018 The Good Times Roll, Even as Risks Rise The bull market powers on, and money continues to flow into the innovation economy. At the same time, we are seeing a reemergence of volatility and a bevy of new risks — including tighter monetary policy and the specter of a trade war — but it’s still status quo for now in the capital markets. Despite market turbulence, the first quarter of 2018 ushered in several high-profile IPOs, and consumer- and enterprise businesses are finding success as public entities. Furthermore, companies reluctant to go down the IPO route found alternative paths. After years of successful fundraising, the world remains awash in capital, and sovereign wealth funds appear poised for even greater contributions. All of these factors are expected to provide further tailwinds for the tech sector. This remains an exciting time for tech around the globe, with some caveats. Innovation companies thrive on open markets, and rich valuations could be undermined by strained geopolitics, wavering consumer confidence and a releveling of investors’ portfolio mix as interest rates rise. While the good times roll, economic cycles don’t last forever, and the trends don’t always point upward. For the moment, however, it’s game on. Bob Blee Head of Corporate Finance
  4. 4. State of the Markets 4 Report Authors Steven Pipp, CFA Research Manager spipp@svb.com Bob Blee Head of Corporate Finance bblee@svb.com Bob Blee heads SVB’s Corporate Finance Group, which provides commercial banking, lending and guidance to late-stage corporate technology clients throughout the United States. Previously, Bob held a variety of roles in SVB’s California and Midwest geographies, most recently heading seed, early and mid- stage Infrastructure, Hardware, Consumer Internet and Fintech banking in the Bay Area and Southern California, as well as SVB’s national Mezzanine Lending practice. Bob sits on the nonprofit board of the Network for Teaching Entrepreneurship (NFTE) and the Silicon Valley Advisory Council of the Commonwealth Club. He is also active with his alma mater, the University of Illinois. Steven Pipp is a Research Manager based in San Francisco, CA, responsible for capital markets research and data-driven analysis of the innovation economies that SVB serves globally. Prior to his research role, Steven managed advisory and valuation engagements for venture-backed technology companies as part of SVB Analytics. Before joining SVB, Steven worked in Minneapolis, MN, as a consultant and entrepreneur in clean energy technology. Steven earned a Master of Science in Finance from Boston College and a Bachelor of Science Business from the University of Minnesota. In addition, he holds the Chartered Financial Analyst (CFA) designation.
  5. 5. This material including, without limitation, to the statistical information herein, is provided for informational purposes only. The material is based in part on information from third- party sources that we believe to be reliable but which have not been independently verified by us, and for this reason, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. © 2018 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). About Silicon Valley Bank For more than 35 years, Silicon Valley Bank has helped innovative companies and their investors move bold ideas forward, fast. SVB provides targeted financial services and expertise through its offices in innovation centers around the world. With commercial, international and private banking services, SVB helps address the unique needs of innovators.
  6. 6. Visit svb.com to download the full report and access additional research produced specifically for entrepreneurs and investors in the global innovation economy. 6 Download the Complete Report https://www.svb.com/state-of-the-markets-report/

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