Listings and sales bring in $ 583 billion for tech investors
U.S. public listings or sales of tech companies brought in $ 582.5 billion to their investors and employees in the 12-month period that began in September 2020, the Financial Times (FT) reported.
Between July and September, 93 companies filed initial public offerings (IPOs), direct listings, or merger agreements with Special Purpose Acquisition Companies (SPACs), more than in any other quarter of the year. year. Registrations for all 12 months totaled $ 513.6 billion, while sales were $ 68.9 billion, according to the report, which cites data from Pitchbook. Transactions with venture capital firms so far in 2021 have already surpassed last year’s record total by more than 40%.
Tech startups filed more traditional IPOs in 2021 than at any time since 2000, according to the report, citing data from Refinitiv.
See also: U.S. IPOs hit record $ 171 billion in total
Oak HC / FT managing partner Andrew Adams said in the report that market conditions had prompted some investors to raise the valuations of private startups and that the IPO made the most sense.
“It puts a lot of pressure on building a great business,” Adams said, according to the report.
Sales and private equity include most of the start-up exits; however, public listings increasingly represent a larger share of the proceeds of venture capital investments, according to the report. Venture capital firms depend on outflows to return funds to investors.
Read also: FinTech-centric PSPCs, Platform IPOs Dominate
Robinhood, for example, gave investors a big exit when it made an IPO at a valuation of $ 32 billion in the third quarter after raising about $ 5.6 billion before listing, according to the report.
Another example, the Coinbase cryptocurrency exchange, was valued at $ 76 billion on the first day of trading in April after raising less than $ 600 million before its debut, making it one of the investments in most successful venture capitalists of all time, according to the report.
The high number of new registrations also included “immature” startups with low sales figures made public through PSPCs, according to the report.
“People are rushing for the exit just so the door doesn’t slam right in front of them,” Cameron Stanfill, risk analyst at PitchBook, said in the report.