According to data from Renaissance Capital the number of IPOs launched in 2014 hit a record of 273. That compares to the most active year in 2000, right before the Internet bubble burst and there were 406 IPOs. The number of IPOs in 2014 represented a 23% increase over 2013 and generated proceeds of $85 billion, which was more than 55% over 2013. Proceeds are a bit inflated due to Alibaba’s $22 billion.
100 health care companies went IPO in 2014, followed by 55 technology companies. However, technology generated the largest proceeds with $32.3 billion against $8.7 billion for health care. Eleven IPO’s raised over $1 billion with Alibaba and JD.com the only two in the technology sector to do so. The average IPO finished up 16.1% from the offering price, which was mostly from first day release gains – as compared to 15% 10-year mean and the S&P 500 8.9% gain.
Consumer and Health care had the highest returns, technology was just average, and energy companies sank. Energy was doing reasonably well through Q3 but the end of year sell off due to depressed energy prices plagued the industry. Biotech’s dominated the best and worst performers with eight of the top ten IPO’s made up of biotech companies. The top ten averaged 27% gains on the first day and 156% in aftermarket trading.
2015 looks to be a good year for IPOs as well with a large backlog of companies in queue. Renaissance Capital forecasts more than 200+ IPOs for 2015. These include such companies as Airbnb, Box, Dropbox, Godaddy, Spotify, Uber, Yodel, Zoosk and others.