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Public Listings, Sales Bring Tech Investors, Employees $583B

U.S. public listings or sales of technology companies brought $582.5 billion to their investors and employees during the 12-month period that started September 2020, the Financial Times (FT) reported.

Between July and September, 93 companies filed initial public offerings (IPOs), direct listings, or merger deals with special purpose acquisition companies (SPACs), more than in any other quarter in the year. Listings for the entire 12 months totaled $513.6 billion, while sales accounted for $68.9 billion, according to the report, which cited Pitchbook data. Deals with venture capital companies so far in 2021 have already moved past last year’s record total by more than 40%.

Technology startups filed more traditional IPOs so far in 2021 than any other time since 2000, the report stated, citing data from Refinitiv.

See also: US IPOs Reach Record $171 Billion Total

Oak HC/FT Managing Partner Andrew Adams said in the report that market conditions prompted some investors to boost valuations of private startups, and going public made the most sense.

“It puts a lot of pressure on building a great company,” Adams said, per the report.

Sales and private equity comprise most startup exits; however public listings are increasingly a larger portion of the proceeds from venture capital investments, according to the report. VC firms are dependent on exits to return funds to investors.

Read also: FinTech-Centered SPACs, Platform IPOs Dominate

Robinhood, for example, gave a big exit for investors when it completed an IPO at a $32 billion valuation in the third quarter after raising roughly $5.6 billion prior to the listing, the report stated.

Another example, cryptocurrency exchange Coinbase, was valued at $76 billion on its first day of trading in April after raising less than $600 million before its debut, making it among the most fruitful VC investments ever, per the report.

The high number of new listings also included “immature” startups with low sales figures going public via SPACs, according to the report.

“People are rushing to the exit just so the door doesn’t slam right in front of them,” said Cameron Stanfill, venture analyst at PitchBook, in the report.



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