2014 IPO Activity Far Outpaces 2013 Through February

by: Renaissance Capital IPO Research

Even with one month left to go, the first quarter of 2014 has already seen more IPOs than the first quarter of 2013 (37 vs. 31). YTD proceeds are 27% higher than last year, despite a 31% dip in average deal size. It does not appear that activity will slow down in March, either: the number of initial filings in January and February is the highest it has been in over a decade. The pipeline is packed with health care and tech companies, which together represent 67% of filings over the last 90 days. 2013 had an impressive run with the highest number of IPOs since 2000, but 2014 could far outpace it if these trends continue.

YTD IPOs and initial filings, 2013 & 2014
as of 2/28 2013 2014 % Change
Filings 21 55 162%
Offerings 20 37 85%
Deal size $5.5B $7.0B 27%
Avg market cap at IPO $1.4B $0.9B (38%)
Average first day pop 13% 16% 300 bps

The YTD Tech Snapshot
Health care companies represent 55% of IPOs to date (fueled by biotechs), but recent filings suggest that the technology sector is poised to pick up. While only three tech IPOs (Care.com (NYSE:CRCM), Varonis (NASDAQ:VRNS) and Coupons.com (NASDAQ:COUP)) have launched in 2014, new offerings on the horizon including King Digital, JD.com and The Rubicon Project should attract significant attention due to size and import.

SaaS and enterprise solutions represent the majority of companies in the IPO pipeline, with noteworthy advertising, mobile and e-commerce plays in the mix. The SaaS companies are no doubt encouraged by the performance of the IPO, Varonis (up 100%). Most of the tech companies are riding a wave of high growth and now hope to scale up operations by accessing public funds.

2014 Tech IPO Filers
Company Product Used For LTM


Care.com (CRCM)* Internet community/market personal care 87%
Varonis Systems (VRNS)* enterprise data control software security 40%
GrubHub (NYSE:GRUB) Internet portal restaurant orders 67%
Sabre (SABR.RC) discount online travel agency flights, hotels & cars 4%
Coupons.com (COUP) discount retail site advertising 50%
The Rubicon Project (NYSE:RUBI) Internet marketplace advertising 54%
Viggle (VGGL.RC) Mobile app advertising 702%
Resonant (NASDAQ:RESN) Mobile technology increase mobile bandwidth n/a
King Digital (BATS:KING) Internet community ecommerce: mobile & social 1,046%
JD.com (JDC.RC) Internet community/market ecommerce: consumer 95%
Borderfree (NASDAQ:BRDR) enterprise SaaS global ecommerce platform 36%
Amber Road (NYSE:AMBR) enterprise SaaS global trade support 21%
Rimini Street (NASDAQ:RMNI) enterprise services software maintenance 31%
Everyday Health (NYSE:EVDY) Internet community consumer health care info 13%
Castlight Health (CSLT) enterprise SaaS health care benefits 212%
Paylocity (PCTY) enterprise SaaS compensation benefits 40%
Q2 Holdings (NYSE:QTWO) SaaS front-end banking software 38%
2U (NASDAQ:TWOU) SaaS front-end education software 49%
A10 Networks (NYSE:ATEN) enterprise hardware network speed & security 18%
Aerohive Networks (NYSE:HIVE) enterprise SaaS & hardware network wifi & security 110%


Disclosure: No positions