According to the CB Insights Tech IPO Pipeline Report, there are 472 VC and private equity-backed technology companies in the U.S. with valuations over $100 million. This group is claimed to be prime for IPOs.
Recently, it seems tech companies are waiting to go public until they have attained this type of higher revenue and greater market share than in years past.
The HR software company Workday is a good example of this, waiting until it was pulling in over $100 million in annual revenue, had a solid team and a high valuation before making its debut last year. This allowed the company to enjoy a stock price that grew 71.6 percent in early trading on its first day—going from $28 a share to $48.05.
IPO Trends to Watch:
— B2B Tech Companies
The tech IPO market appears ripe for B2B companies. In fact, the CB Insights Tech IPO Pipeline Report found that 80 percent of technology companies that are likely to file for an IPO within a year aim their products at businesses rather than consumers.
— Cloud, Mobile, Big Data, Marketing and Social
Further, many of the companies expected to go public in the next year operate in the cloud and/or offer mobile-centric services. Big data, marketing and social companies continue to be popular, and it’s likely that trend will only grow as we progress into the year.
— Tableau Software
The example of companies like Workday has likely led to Tableau Software’s decision to go public this year. The company operates in a similar sphere, and Christian Chabot, the CEO of Tableau Software, revealed to Bloomberg that the company is set to IPO in the next four to nine months.
The company has experienced strong sales performance and enjoys thousands of high-profile customers, including Walmart, eBay and LinkedIn, which should contribute to a strong IPO.
Also on the horizon is Twitter. Multiple experts are predicting that the company has learned from Facebook’s mistake and wants to go public while its revenue is still in an upswing (as a result of advertising sales from “promoted tweets”). Hamadeh is predicting that Twitter will go public in late 2013 or early 2014.
— And More
Venture Beat’s round up of 17 companies expected to go the IPO route this year included marketing company Hubspot, which just finished a final round of funding; SurveyMonkey, which received a $1 billion valuation in December; and Atlassian, which is pulling in over $100 million in revenues and added three new board members this past summer to help prep for an IPO.
A Market in Recovery:
Ernst & Young predicted in its Year-end Global IPO Update at the end of last year that the market would begin to show signs of recovery in 2013, followed by Europe and Asia later in the year: “Reduced stock market volatility, assertive action from central banks and brighter economic prospects suggest 2013 could be the right time for companies currently in the pipeline to list.”
With the stock market reaching a five-year high in January, that prediction seems likely to come true—making it likely that the tech IPO market will pick up speed as we move forward in 2013.