Q3 04 Venture-Backed IPOs


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Q3 04 Venture-Backed IPOs

  1. 1. Emily Mendell, NVCA, 610-359-9609, emendell@nvca.org Joshua Radler, Thomson Venture Economics, 212-806-3146, Joshua.radler@thomson.com Venture-Backed IPO Market Continued Steady Climb in Third Quarter of 2004 Google, Internet Companies Positively Impacted Quarter New York, NY- October 1, 2004—Twenty-four venture-backed companies raised $3.2 billion through Initial Public Offerings (IPOs) in the third quarter of 2004, according to Thomson Venture Economics and the National Venture Capital Association (NVCA). Although down from the prior quarter’s total of twenty-nine IPOs, the third quarter continued the trend of steady IPO activity seen over the last year. The $3.2 billion raised marks the third consecutive quarter over $2.0 billion, and the fourth consecutive quarter over $1.0 billion. The quarter was highlighted by Google, Inc.’s $1.7 billion IPO, which accounted for 52% of the $3.2 billion raised. Nevertheless, twenty-four venture-backed IPOs ranked second for activity since the fourth quarter of 2000, when twenty-seven venture-backed companies went public. Overall, eighteen of the twenty four companies, or 75%, are currently trading above their offering price. Boosted by Google, Inc., there were 13 tech IPOs, of which 5 were Internet-related in the third quarter. Google had an investor group comprised of Kleiner Perkins Caufield & Byers, Sequoia Capital, and Angel Investors, LP. The next largest venture-backed IPO, also Internet related, was MortgageIT, Inc., which raised $175.2 million followed by Ness Technologies, which raised $140.1 million. “This last quarter is a testament to the tenacity of entrepreneurs and venture capitalists who were able to persevere during difficult times and emerge as strong, viable public companies,” said Mark Heesen, president of the National Venture Capital Association. “These organizations are poised to move forward as job and revenue generators and vehicles of innovation across a number of sectors including the Internet, Communications, and Life Sciences. We expect that this trend will continue in the coming year.” This quarter the Life Sciences sector had eight venture-backed IPOs, raising a total of $380.0 million. The largest IPO in the LifeSciences Sector was MannKind Corporation, which raised $87.5 million and was backed by Biomed Partners. The next largest Life Science IPOs were Idenix Pharmaceuticals, Inc., which raised $81.2 million followed by Syneron Medical, which raised $60.0 million. In addition to the IPOs completed this quarter, there are currently 81 venture-backed companies “in registration” with the Securities and Exchange Commission. These companies have filed with the SEC in 2004 and are now preparing for their initial public offerings. Comparatively, there were 79 venture-backed companies “in registration” at the end of the second quarter of 2004.
  2. 2. Analysis of Recent Quarters' IPOs Total Avg. Number Total Avg. Venture Venture of Venture Venture Backed Backed Venture Backed Backed Post Post Backed Offering Offering Offering Offering Quarter Number IPO's in Size Size Value Value Ending of IPO's the U.S. ($Mill) ($Mill) ($Mill) ($Mill) 6/30/2002 35 15 1,836.1 122.4 5,917.6 394.5 9/30/2002 8 1 30.0 30.0 153.4 153.4 12/31/2002 27 4 231.2 57.8 523.8 130.9 3/31/2003 5 1 77.2 77.2 147.8 147.8 6/30/2003 5 2 164.0 82.0 695.3 347.6 9/30/2003 20 9 732.8 81.4 3,064.5 340.5 12/31/2003 52 17 1,048.7 61.7 4,349.9 255.9 3/31/2004 42 13 2,721.1 209.3 10,575.0 813.5 6/30/2004 58 29 2,077.8 71.6 8,930.4 307.9 9/30/2004 64 24 3,225.6 134.4 29,596.8 1,233.2 Thomson Venture Economics & National Venture Capital Association Q3 Industry Breakdown Number of Venture Total Venture Backed Backed IPO's in the Offering Size U.S. ($Mil) Industry Internet Specific* 5 1,997.6 Communications/Media 3 257.3 Computer Software 3 223.6 Technology Computer Hardware 1 93.0 Semiconductor 1 36.0 TOTAL 13 2,607.4 Medical/Health 5 181.9 Life Sciences Biotechnology 3 198.1 TOTAL 8 380.0 Non-high Technology 3 238.2 Other TOTAL 3 238.2 * Includes $1.7 billion Google IPO Index Year to One Year Three Five Year Ten Year Value Date Return Year Return Return Return 539.07 -0.7% 13.6% 8.9% -9.6% 6.9% PVCI 1,114.58 0.2% 11.9% 2.3% -2.8% 9.2% S&P 1,896.84 -5.3% 6.2% 8.2% -7.1% 9.5% NASDAQ
  3. 3. 10,080.30 -3.6% 8.7% 4.4% -0.5% 10.1% DOW Thomson Venture Economics & National Venture Capital Association The Thomson Venture Economics Post-Venture Capital Index (PVCI) is a market cap weighted index of the performance of stock of all venture-backed companies taken public over the last 10 years. As the chart indicates, the PVCI has outperformed the public markets over one and three years, but has lagged over five and ten years. Thomson Venture Economics, a Thomson Financial company, is the foremost information provider for equity professionals worldwide. Venture Economics offers an unparalleled range of products from directories to conferences, journals, newsletters, research reports, and the VentureXpert™ database. For over 40 years, Venture Economics has been tracking the venture capital and buyouts industry. Since 1961, it has been a recognized source for comprehensive analysis of investment activity and performance of the private equity industry. Venture Economics maintains a long-standing relationship within the private equity investment community, in-depth industry knowledge, and proprietary research techniques. Private equity managers and institutional investors alike consider Venture Economics information to be the industry standard. For more information about Venture Economics, please visit www.ventureeconomics.com. Thomson Financial Thomson Financial is a US$2 billion provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a leading provider of integrated information solutions to business and professional markets worldwide. The Corporation reported 2003 revenues of US$7.6 billion and its common shares are listed on the Toronto Stock Exchange (TSX: TOC) and the New York Stock Exchange (NYSE: TOC). The National Venture Capital Association (NVCA) represents approximately 450 venture capital and private equity firms. NVCA's mission is to foster greater understanding of the importance of venture capital to the U.S. economy, and support entrepreneurial activity and innovation. According to a 2004 Global Insight study, venture-backed companies accounted for 10.1 million jobs and $1.8 trillion in revenue in the United States in 2003. The NVCA represents the public policy interests of the venture capital community, strives to maintain high professional standards, provides reliable industry data, sponsors professional development, and facilitates interaction among its members. For more information about the NVCA, please visit www.nvca.org.