OREANDA-NEWS. Twelve venture-backed initial public offerings (IPOs) raised $893.9 million in the second quarter of 2016, according to the Exit Poll Report by Thomson Reuters and the National Venture Capital Association (NVCA).  IPO activity in the second quarter marks a 56 percent increase by dollars and a 100 percent increase by number of offerings compared to the first quarter.  For merger and acquisition (M&A) activity, sixty-one venture-backed M&A deals were reported in the second quarter, 11 of which reported an aggregate deal value of $9.0 billion.   

"Biotech IPO activity continues to be the bright spot to an otherwise sleepy IPO market for venture-backed companies," said Bobby Franklin, President and CEO of NVCA.  "With Twilio making its anticipated debut on the New York Stock Exchange in June, we will be watching closely to see if this finally opens the doors for other venture-backed technology companies to float on the public markets.  However, in the first half of 2016 we're well behind the pace of where we were at this time the prior two years, and if we continue to see more private capital flow into later stage companies in the entrepreneurial ecosystem, it's likely that the IPO slumber may continue in the second half of the year."

Quarter/Year Total  M&A Deals M&A Deals with Disclosed Values *Total Disclosed M&A Value ($M) *Average M&A Deal Size ($M) **Number of IPO's  Total Offer  Amount ($M) Average IPO Offer Amount ($M)
2011 502 170 24,197.2 142.3 50 10,441.1 208.8
2012-1 115 29 3,813.5 131.5 19 1,682.8 88.6
2012-2 124 34 6,304.4 191.0 12 17,227.9 1,435.7
2012-3 124 38 8,687.6 228.6 10 1,140.7 114.1
2012-4 129 32 4,031.1 126.0 7 1,302.6 186.1
2012 492 133 22,836.7 173.0 48 21,354.1 444.9
2013-1 85 11 1,019.3 92.7 8 716.9 89.6
2013-2 98 20 4,375.7 218.8 22 2,249.9 102.3
2013-3 116 30 4,856.7 161.9 27 2,781.4 103.0
2013-4 96 34 6,662.5 196.0 24 5,320.1 221.7
2013 395 95 16,914.2 178.0 81 11,068.2 136.6
2014-1 116 31 7,620.0 245.8 37 3,404.5 92.0
2014-2 120 39 4,142.5 109.0 29 5,039.9 173.8
2014-3 136 36 8,590.2 238.6 24 2,704.3 112.7
2014-4 114 34 27,787.3 817.3 27 4,363.4 161.6
2014 486 140 48,139.9 346.3 117 15,512.1 132.6
2015-1 99 18 2,181.7 121.2 17 1,437.2 84.5
2015-2 80 15 4,187.5 279.2 29 3,798.8 131.0
2015-3 111 27 6,883.4 254.9 15 1,903.8 126.9
2015-4 108 31 4,535.9 151.2 16 2,244.4 140.3
2015 398 91 17,788.5 197.6 77 9,384.2 121.9
2016-1 91 23 5,182.2 225.3 6 574.5 95.7
2016-2 64 11 9,030.9 903.1 12 893.9 745.5
2016 155 34 14,213.1 418.0 18 1,468.4 81.6

Source: Thomson Reuters & National Venture Capital Association
* Only accounts for deals with disclosed values
**Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile

IPO Activity Overview

Twelve venture-backed IPOs raised an aggregate of $893.9 million in the second quarter of 2016.  By number of offerings, quarterly volume increased 100 percent compared to the first quarter of 2015 and registered a 56 percent increase by dollars raised. 

Led by biotechnology companies, nine of this quarter's offerings were life sciences IPOs.  Three technology IPOs raised a total of $360.0 million during the second quarter of 2016. 

By location, 11 of the quarter's IPOs were from U.S.-based companies.  The only non-U.S. offering of the quarter, Netherlands-based Merus BV (MRUS), raised $61.4 million on the NASDAQ stock exchange on May 18th. 

In the largest IPO of the quarter, San Francisco, California-based Twilio Inc (TWLO), raised $150.0 million and began trading on the New York Stock Exchange on June 22nd.  At the end of the second quarter, the company traded nearly three times above its $15 offering price. 

  Q2 2016
  Industry *Number of Venture-Backed IPO's in the U.S. Total Venture-Backed Offering Size ($M)
Technology Computer Software and Services 2 241.0
Semiconductors/Other Elect. 1 119.0
Life Sciences   3 360.0
Biotechnology 9 533.9
    9 533.9
TOTAL 12 893.9

Source: Thomson Reuters & National Venture Capital Association
*Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile

Eleven venture-backed companies listed on the NASDAQ stock exchange during the second quarter of 2016, while one IPO listed on the New York Stock Exchange.

Six of the ten companies brought to market in the second quarter were trading at or above their offering price at the close of the quarter.  There are 41 venture-backed companies currently registered publicly for an IPO with the SEC.  This figure does not include confidential registrations filed under the JOBS Act, where many observers believe the majority of venture-backed companies now file.

Mergers and Acquisitions Overview

As of June 30th, 61 venture-backed M&A deals were reported for the second quarter of 2016, 11 of which had an aggregate deal value of $9.0 billion, a 29 percent decline compared to the overall number of deals reported during the first quarter of 2016, but an increase of 74 percent, by disclosed M&A value, compared to the previous quarter.

The information technology sector led the venture-backed M&A landscape with 46 of the 64 deals of the quarter and had a disclosed total dollar value of $1.4 billion.  Within this sector, computer software and services and internet specific deals accounted for the bulk of the targets with 27 and 15 transactions, respectively. 

  Q2 2016
  Industry Number of Venture- Backed M&A deals Number of  Venture- Backed M&A  deals with a disclosed value Total Disclosed Venture- Backed  Deal Value ($M)
Information Technology Computer Software and Services 27 3 1,230.0
Internet Specific 15 0 0.0
Semiconductors/Other Elect. 2 2 172.1
Computer Hardware 1 0 0.0
Communications and Media 1 0 0.0
  46 5 1,402.1
  Medical/Health 6 1 1,200.0
Life Sciences Biotechnology 4 4 6,078.8
  10 5 7,278.8
Non-High Technology Industrial/Energy 4 1 350.0
Consumer Related 2 0 0.0
Other Products 2 0 0.0
  8 1 350.0
TOTAL 64 11 9,030.9

Source: Thomson Reuters & National Venture Capital Association

The largest venture-backed M&A transaction during the second quarter of 2016 was Abbvie Inc's $5.8 billion acquisition of South San Francisco, California-based Stemcentrx Inc, followed by McKesson Specialty Health's $1.2 billion purchase of Vantage Oncology, Inc, a Manhattan Beach, California-based operator of radiation oncology treatment centers. The combination of these two deals pushed the disclosed value of venture-backed exits in the life sciences sector during the second quarter of 2016 to an all-time quarterly record.

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About National Venture Capital Association

Venture capitalists are committed to funding America's most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth.  As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment.  As the venture community's preeminent trade association, the NVCA serves as the definitive resource for venture capital data and unites its member firms through a full range of professional services.