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Global Technology IPO Review Full-year and Q4 2016
Global Technology IPO Review Full-year and Q4 2016 1
Global tech IPOs in 2016 dropped to their lowest level in the decade amidst macroeconomic and geopolitical turmoil, but a stream of high-profile companies in the pipeline will likely create a resurgence in 2017*
Raman Chitkara Partner and Global Technology
Industry Leader
PricewaterhouseCoopers LLP
On the heels of two strong years, 2016 ended with the fewest global technology IPOs of any year in the decade, with only 53 tech
companies completing initial public offerings for total proceeds of US$8.7 billion. That’s a 42% decline in volume and a 68% decline in
proceeds from 2015. With 20 tech IPOs, Q3 was the best period of the year, but Q4 was the worst, with just nine tech IPOs. The market
rally following the US elections bodes well for a healthier global tech IPO market in 2017.
The year started slowly with only 24 IPOs and US$2.2 billion in proceeds in the first half of 2016, a result of the steep stock market sell-off
in January that froze out potential IPO companies. Volatility and uncertainty closed the US IPO window, and China posted just three tech
IPOs in the first quarter. The UK, historically one of the leading markets in Europe, saw no tech IPOs in 2016, a result of uncertainty over
the Brexit election that grew into concern about executing on the outcome. Although the UK was absent, Europe posted reasonable results
with 10 IPOs from eight countries, including three of the largest tech IPOs of the year. They included the largest, Net A/S, a digital
payments company in Denmark, at US$2.4 billion.
Given uncertainty associated with the US presidential election, most companies chose to remain on the sidelines in the fourth quarter.
Overall, tech IPOs rebounded in the second half of 2016, with an almost three-fold jump in proceeds. Even so, average proceeds only
equaled those in 2010 (US$165 million), the prior low for the decade. Big-ticket IPOs that were common in 2014 and 2015 were all but
non-existent in 2016.
With 80% of tech companies that debuted in 2014 or 2015 typically trading below their first-day closing prices during most of 2016,
valuations became a key concern.1 The combination of uncertain market conditions, high private valuations and ample cash caused many
companies to wait until public markets offer a more favorable environment, like we’re starting to see in early 2017.
Looking ahead, optimism for higher economic growth post US elections has spurred a market rally. With investors keeping a sharp focus
on profitability, not simply revenue growth, we expect the companies going public will likely have better earnings quality and less
aggressive valuations than in recent years. This should help to support and accelerate tech IPOs in 2017.
Sincerely,
1. https://www.bdo.nz/getattachment/Insights/Advisory/Newsletters/2016-Technology-Risk-Factor-Report/2016-Technology-RiskFactor-Report-Brochure-WEB.pdf.aspx?lang=en-NZ
*Issue size greater than US$40
million (includes overallotment)
and based on trade date;
See Methodology
Table of contents
1. Full-year 2016 global tech IPO summary 3 2. A close look at full-year 2016 technology IPOs 12
Geographic IPO trends – Full-year 2016 ...................................................................................................................................... 12
Europe and the UK .................................................................................................................................................................. 12
China ........................................................................................................................................................................................ 13
United States ........................................................................................................................................................................... 14
Full-year 2016 tech IPOs – Offering details ........................................................................................................................... 15
3. Q4 2016 Global tech IPO summary 19
Q4 2016 Top 5 technology listings ................................................................................................................................................ 20
Q4 2016 Geographic tech IPO trends ............................................................................................................................................ 21
United States .......................................................................................................................................................................... 22
China ....................................................................................................................................................................................... 24
Europe (excluding UK) ........................................................................................................................................................... 25
UK ........................................................................................................................................................................................... 26
Asia (Excluding China) ........................................................................................................................................................... 27
Average proceeds .......................................................................................................................................................................... 28
Age of company ............................................................................................................................................................................. 29
4. Q4 2016 Stock exchange distribution 30 5. Q4 2016 Subsector distribution 31 6. Key financials—Q4 2016 33
Q4 2016 Technology IPO listings: Valuation metric ................................................................................................................... 38
Top three subsectors in Q4 2016 ................................................................................................................................................... 40
7. Methodology 61 8. For more information 62
Global Technology IPO Review Full-year and Q4 2016 3
Full-year 2016 global tech IPO summary
The year with the fewest tech IPOs in the decade
As measured by numbers of IPOs and total proceeds, 2016
was the slowest year of the decade for global tech IPOs,
beating 2013 for this dubious distinction. It also matched
the previous low for average proceeds, US$165 million, in
2010. IPOs declined 42% in volume and 68% in total
proceeds from 2015 to 2016.
Figure 1: Global tech IPOs 2010-2016
Source: S&P Capital IQ with analysis by PwC
$17,952$15,857
$23,155
$11,446
$51,193
$27,103
$8,745
109
87 69
64
118
92
53
-
20
40
60
80
100
120
140
2010 2011 2012 2013 2014 2015 2016
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
No
. o
f IP
Os
US
$ m
illi
on
s
Total proceeds (US$mn) Total number of IPOs
“Several factors suggest the 2017 global tech IPO market will be much better: the postelection stock market rally,
the promise of US tax reform, general economic conditions, cyclicality of the tech IPO market and pent-up demand
for public offerings.”
Raman Chitkara
Global Technology Industry Leader
Global Technology IPO Review Full-year and Q4 2016 4
After a slow start, global tech IPOs bounced back in the second half of 2016
The global technology IPO market gained momentum in Q3
after a slow first half. Twenty-nine technology IPOs were
listed in the second half versus 24 in the first half. The
second-half resurgence occurred in Q3 with 20 IPOS, as
most tech companies shied away from the IPO market
in Q4.
Only two Unicorns completed their IPOs in 2016, both
in Q3.
Figure 2: 2010-2016 1st half vs 2nd half tech IPOs
Source: S&P Capital IQ with analysis by PwC
$8,699 $9,253 $8,710$7,147
$20,817
$2,338
$4,588
$6,858
$18,955
$32,237
$12,225
$14,878
$2,250
$6,495
55 54 53
34
19
50
27
37
66
52
59
33
24
29
-
10
20
30
40
50
60
70
1st Half2010
2ndHalf2010
1st Half2011
2ndHalf2011
1st Half2012
2ndHalf2012
1st Half2013
2ndHalf2013
1st Half2014
2ndHalf2014
1st Half2015
2ndHalf2015
1st Half2016
2ndHalf2016
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 5
Number of offerings and proceeds declined for all regions except Europe (excluding UK)
China led with 18 tech IPOs in 2016, followed by the US with 16; aggregate proceeds were US$1.4 billion and US$1.8 billion, respectively. Europe, excluding the UK, had 10 IPOs, including the largest of the year, Nets A/S. Nets, a digital payment services company, raised US$2.4 billion, which was two-thirds of the total proceeds of US$3.7 billion from Europe’s IPOs. The UK had no tech IPOs this year compared to nine in 2015 and seven in 2014 owing to uncertainty over the Brexit vote and its aftermath. Asia, excluding China, saw a dip in proceeds due to fewer IPOs. Only Japan provided some support for the region. It had three tech IPOs and the fourth highest proceeds, led by the second largest IPO of the year, Line Corp. Line, a messaging app, raised US$1.1 billion in the year’s largest NYSE tech IPO. The US’s Nutanix was the largest VC-backed tech IPO listing on the NASDAQ in 2016, raising US$238 million.
Overall, the US IPO market declined, registering 16 tech
IPOs and raising US$1.8 billion compared with 23 tech
IPOs and US$8.4 billion in 2015.
While several large leveraged buyouts and high-profile
startups remain on the sidelines, there are signs of a
possible flurry of tech IPOs in the next 12 months.
Figure 3: 2014-2016 Geographic distribution—Number of IPOs
Source: S&P Capital IQ with analysis by PwC
Figure 4: 2014-2016 Geographic distribution—Proceeds
Source: S&P Capital IQ with analysis by PwC
8
19
7
45
37
11
17
9
30
23
10 9
0
18 16
Europe w/o UK Asia w/o China UK China US
0
10
20
30
40
50
No. of IPOs
2014 2015 2016
No
. o
f IP
Os
$3,570
$7,298
$3,277
$29,063
$7,850
$3,176 $3,381
$7,811
$4,074
$8,396
$3,674$1,833
$0$1,438 $1,800
Europe w/o UK Asia w/o China UK China US
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000Proceeds raised
2014 2015 2016
US
$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 6
Tech IPO activity in Europe remained brisk in 2016 despite challenges in other markets
Tech IPO activity in Europe, excluding the UK, remained
brisk in 2016 despite challenges elsewhere. There was
broad distribution across eight countries, including
Denmark, which had the largest tech IPO of the year.
Overall, Europe contributed three of the largest tech IPOs
of 2016.
Figure 5: Full-year 2016 European tech IPOs
Source: S&P Capital IQ with analysis by PwC
"The European market proved to be notably strong in 2016, in spite of the migration crisis and the Brexit
referendum. The expansionary monetary policy in place led investors to look for alternatives to the low
interest rate environment. This was translated positively to the European capital market. With US$3,674
million in total proceeds, we experienced in Europe the largest volume of tech IPOs worldwide."
Werner Ballhaus
Technology, Media and Telecommunications Industry Leader, PwC Germany
Global Technology IPO Review Full-year and Q4 2016 7
Lack of big-ticket IPOs pushed average proceeds down to a seven-year low
It was not a year for high-flying tech IPOs, with only two US$1 billion-plus offerings. This reduced average proceeds to a level not seen since 2010. However, the majority of tech companies going public in 2016 were long-standing enterprises with histories of strong financial performances.
Figure 6: 2010-2016 Average proceeds
Source: S&P Capital IQ with analysis by PwC
$165$182
$336
$179
$434
$295
$165
109
87
69
64
118
92
53
0
20
40
60
80
100
120
140
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2010 2011 2012 2013 2014 2015 2016
Average proceeds No. of IPOsU
S$ m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 8
Internet Software & Services (IS&S) and Software subsectors remained the growth engine for tech IPOs, with 32 IPOs raising US$4.7 billion
The largest IPO of the year was an IT Consulting & Services company, Nets A/S of Denmark, which raised US$2.4 billion. But the pivotal subsectors for tech IPOs were Internet Software & Services and Software, with a combined 32 IPOs and proceeds of US$4.7 billion.
Figure 7: Full-year 2016 subsector distribution
Source: S&P Capital IQ with analysis by PwC
$4,655
$517$41
$239
$3,000
$293
32
8
1 2
5 5
-
5
10
15
20
25
30
35
Internet Software& Services and
Software
Semiconductors ComputerStorage &
Peripherals
CommunicationsEquipment
IT Consulting &Services
Electronics
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Total proceeds (US$mn) Number of IPOsU
S$
mil
lio
ns
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 9
Compared to the previous six years the Internet Software & Services and Software subsectors experienced a pullback in 2016 with the second lowest proceeds and number of IPOs in the decade
Figure 8: 2010-2016 IPOs for the Internet Software & Services and Software subsectors
Source: S&P Capital IQ with analysis by PwC
$3,369
$8,679
$20,172
$7,297
$40,620
$19,508
$4,655
22
38
34
42
82
56
32
-
10
20
30
40
50
60
70
80
90
2010 2011 2012 2013 2014 2015 2016
$-
$9,000
$18,000
$27,000
$36,000
$45,000
IS&S and Software - Total proceeds IS&S and Software - No. of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 10
Broad participation across global exchanges
With volatility and uncertainty dominating the major
markets in China, the UK and the US, companies outside
these countries largely chose to list on their home
exchanges. Copenhagen’s OMX registered the biggest tech
IPO of the year, Nets A/S, raising US$2.4 billion.
The Tokyo SE registered a total of US$111 million with two
offerings and India’s BSE and NSE exchanges registered a
total of three tech IPOs with US$318 million in proceeds.
Australia listed three companies with proceeds of US$283
million, one of which is domiciled in Ireland. The OMX in
Stockholm listed four companies with proceeds of US$320
million, one of which is domiciled in Malta.
Figure 9: 2016 Full-year stock exchange distribution
Source: S&P Capital IQ with analysis by PwC
$1,669
$1,983
$782
$311
$186$283
$369
$42$111 $134 $185
$2,371
$3204
17
10
5
1 3
1
1 2 2
1
1 4
-
6
12
18
24
30
36
$0
$500
$1,000
$1,500
$2,000
$2,500
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 11
Cross-border IPO activity has not changed much despite the pullback in IPOs
Cross-border IPOs, as a percentage of the total, were within the 15%-to-17% range, which was mostly consistent with recent years.
Figure 10: 2010-2016 Cross-border tech IPO activity
Source: S&P Capital IQ with analysis by PwC
19 13 16 11 18 11 8
90
74 53
53
100
81
45
17%
15%
23%
17%
15%
12%
15%
-
20
40
60
80
100
120
140
2010 2011 2012 2013 2014 2015 2016
0%
5%
10%
15%
20%
25%
US
$ m
illi
on
sCross-border IPOs Domestic IPOs % of Cross-border IPOs
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 12
A close look at full-year 2016 technology IPOs
Geographic IPO trends – Full-year 2016
Europe and the UK
Europe, excluding the UK, posted strong performance, while the UK languished with no IPOs this year
Europe, excluding the UK, was the best performing region
in 2016, registering 10 IPOs with total proceeds of US$3.7
billion, a 16% increase over 2015.
Europe had the biggest IPO listing of the year (US$2.4
billion), Nets A/S, which provides digital payment services
and related technology solutions. Other tech IPOs from
Europe included Takeaway.com, a food delivery app from
the Netherlands, with proceeds of US$369 million; Global
Dominion Access, S.A., an IT and consulting services
company from Spain, raising US$185 million; Talend SA, a
software-based platform provider from France, raising
US$95 million; German Internet software and services
company Trivago NV, raising US$287 million; Catena
Media PLC, an Internet software and services company
from Malta, raising US$101 million; Oneview Healthcare
PLC, an Irish company, with US$47 million; and three
companies from Sweden all listing on the Nordic Exchange
in Stockholm, LeoVegas AB (US$111 million), Paradox
Interactive AB (US$65 million), and THQ Nordic AB
(US$43 million).
Figure 11: 2010-2016 Europe (excluding UK) tech IPOs
Figure 12: 2010-2016 UK tech IPOs
Source: S&P Capital IQ with analysis by PwC
$2,777
$1,846
$352
$754
$3,571
$3,176
$3,674
3
6
3 4
8
11
10
-
12
2010 2011 2012 2013 2014 2015 2016
$-
$1,000
$2,000
$3,000
$4,000
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
$843 $0 $0$730
$3,277
$7,811
$0
2
- -
4
7
9
- -
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015 2016
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 13
China
Chinese tech IPO results were adversely affected by the decline in China’s economic growth, increased volatility on Chinese exchanges and regulatory actions
China reported 18 IPOs, but the proceeds raised were
relatively low (US$1.4 billion) with an average of US$80
million. The number of Chinese tech IPOs dropped 40%
and proceeds fell 65% from 2015 to 2016.
China’s economic slowdown continued, with GDP growth
declining from 7.4% in 2014 to 6.9% in 2015. Chinese stock
exchange regulators stalled IPOs twice in the last two years
for various regulatory reasons. New IPO regulations likely
contributed to a more cautious atmosphere for Chinese tech
IPOs. The Chinese market is expected to improve this year.
Figure 13: 2010-2016 China tech IPOs
Source: S&P Capital IQ with analysis by PwC
$9,249$7,415
$2,439$1,026
$29,063
$4,074
$1,438
70
50
33
8
45
30
18
-
10
20
30
40
50
60
70
80
2010 2011 2012 2013 2014 2015 2016
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Total proceeds (US$mn) Number of IPOsU
S$
mil
lio
ns
No
. o
f IP
Os
“After a one-year adjustment, China’s capital market gradually returned to its normal rhythm during the
second half of 2016, although the proceeds of each IPO was generally small. In November 2016 the Chinese
Regulatory Commission (CSRC) sped up the approval of IPOs, setting the stage for acceleration in the number
of 2017 IPOs for Hong Kong and domestic markets.”
Jianbin Gao
Technology Industry Leader, PwC China
Global Technology IPO Review Full-year and Q4 2016 14
United States
Historical cyclicality combined with a high level of uncertainty about the US presidential election led most US technology companies to remain on the sidelines in 2016
The US tech IPO market exhibited subdued performance in
2016. US tech IPOs slid by almost 79% in proceeds to
US$1.8 billion and 30% by number of listings to 16 IPOs.
The average deal size was a US$113 million.
Market volatility, geopolitical actions in Europe and the US
presidential election left investors uncertain and uneasy
and high-profile startups choosing not to test the public
markets.
Figure 14: 2010-2016 US tech IPOs
Source: S&P Capital IQ with analysis by PwC
$2,150
$4,926
$20,316
$7,591 $7,850$8,396
$1,800
19
24
32 35
37
23
16
-
8
16
24
32
40
2010 2011 2012 2013 2014 2015 2016
$-
$5,000
$10,000
$15,000
$20,000
$25,000
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
“After a slow start to 2016, there was some rebound in both the number of tech IPOs and returns to investors,
despite ongoing uncertainty about the economy and election. We anticipate improvement in market
conditions given positive equity market returns. This momentum creates a window for tech companies to
pursue a potential IPO. Buy-side investors will demand a path to profitability, not simply revenue growth, to
bring these companies to market in 2017.”
Alan Jones
Technology Deals Partner, PwC US
Global Technology IPO Review Full-year and Q4 2016 15
Full-year 2016 tech IPOs – Offering details
Table 1: 2016 tech IPOs – By issue date
Issue date Company Subsector Proceeds (US$mn) Primary exchange Domicile nation
Q1
3/17/2016 LeoVegas AB (publ) Internet Software & Services
110.7 Nordic Exchange Stockholm
Sweden
2/11/2016 Catena Media Plc Internet Software & Services
101.3 Nordic Exchange Stockholm
Malta
2/18/2016 Quick Heal Technologies Limited IT Consulting & Services
65.9 Mumbai Stock Exchange India
3/3/2016 Eoptolink Technology Inc Ltd Electronics 63.9 Shenzhen Stock Exchange
China
3/17/2016 Akatsuki Inc Software 56.5 Tokyo Stock Exchange Japan
3/15/2016 UMC Electronics Co Ltd Semiconductors 54.4 Tokyo Stock Exchange Japan
3/21/2016 Tongyu Commun Inc Communications Equipment
132.1 ShenzSME China
3/15/2016 Changsha Jingjia Micro Co Ltd Semiconductors 70.5 ShenzChNxt China
3/28/2016 Infibeam Inc Ltd Internet Software & Services
67.6 Mumbai Stock Exchange India
3/16/2016 Oneview Healthcare Plc Software 46.5 Australian Securities Exchange
Ireland
Q2
04/11/2016 Wisetech Global Limited Internet Software & Services
125.8 Australian Securities Exchange
Australia
04/21/2016 SecureWorks Corp Software 112.0 NASDAQ Global Select United States
04/24/2016 Nanjing Doron Technology Co Ltd
Software 75.2 Shanghai Stock Exchange China
04/26/2016 Global Dominion Access SA IT Consulting & Services
185.5 Bolsas y Mercados Espanoles
Spain
Global Technology IPO Review Full-year and Q4 2016 16
Full-year 2016 tech IPOs – Offering details
Table 1: 2016 tech IPOs – By issue date
Issue date Company Subsector Proceeds (US$mn) Primary exchange Domicile nation
05/12/2016 Acacia Communications Inc Semiconductors 103.5 NASDAQ Global Select United States
05/16/2016 Hubei Jiuzhiyang Infrared System Co Ltd
Electronics 100.9 Shenzhen Stock Exchange
China
05/25/2016 Cotiviti Holdings Inc Software 237.5 New York Stock Exchange
United States
05/26/2016 Paradox Interactive AB (publ) Software 65.0 Nordic Exchange Stockholm
Sweden
06/02/2016 NantHealth LLC Software 91.0 New York Stock Exchange
United States
06/09/2016 China Online Education Group Internet Software & Services
65.6 New York Stock Exchange
China
06/20/2016 HAESUNG DS Co Ltd Semiconductors 41.5 Korea Stock Exchange South Korea
06/22/2016 Twilio Inc Internet Software & Services
1500 New York Stock Exchange
United States
06/22/2016 Wuxi New Hongtai Electrical Technology Co Ltd
Electronics 47.8 Shanghai Stock Exchange China
06/23/2016 Shenzhen Shengxunda Technology Co Ltd
Software 78.9 Shenzhen Stock Exchange
China
Global Technology IPO Review Full-year and Q4 2016 17
Full-year 2016 tech IPOs – Offering details
Table 1: 2016 tech IPOs – By issue date
Issue date Company Subsector Proceeds (US$mn) Primary exchange Domicile nation
Q3
07/11/2016 LINE Corporation Software 1,125.2 New York Stock Exchange
Japan
07/14/2016 Larsen & Toubro Infotech Limited
IT Consulting & Services
184.8 National Stock Exchange of India
India
07/20/2016 Impinj Inc Semiconductors 67.2 NASDAQ Global Select United States
07/25/2016 Beijing Global Safety Technology Co Ltd
Software 65.6 Shenzhen Stock Exchange
China
07/28/2016 Talend SA Software 94.5 NASDAQ Global Market France
08/08/2016 Shenzhen Urovo Technology Co Ltd
Electronics 40.1 Shenzhen Stock Exchange
China
08/09/2016 GigaDevice Semiconductor (Beijing) Inc
Semiconductors 87.3 Shanghai Stock Exchange China
08/17/2016 Shenzhen Bingchuan Network Co Ltd
Software 139.5 Shenzhen Stock Exchange
China
09/13/2016 Beijing Advanced Digital Technology Co Ltd
Software 49.8 Shenzhen Stock Exchange
China
09/13/2016 Shenzhen Emperor Technology Co Ltd
Computers & Peripherals 40.8 Shenzhen Stock Exchange
China
09/14/2016 Shanghai Wondertek Software Co Ltd
Software 60.0 Shanghai Stock Exchange China
09/15/2016 Everbridge Inc Software 90.0 NASDAQ Global Market United States
09/20/2016 The Trade Desk Inc Internet Software & Services
84.0 NASDAQ Global Market United States
09/23/2016 Nets A/S IT Consulting & Services 2,371.3 Nordic Exchange Copenhagen
Denmark
Global Technology IPO Review Full-year and Q4 2016 18
Full-year 2016 tech IPOs – Offering details
Table 1: 2016 tech IPOs – By issue date
Issue date Company Subsector Proceeds (US$mn) Primary exchange Domicile nation
09/23/2016 Apptio Inc Internet Software & Services
96.0 NASDAQ Global Market United States
09/23/2016 Gridsum Holding Inc Software 87.1 NASDAQ Global Market/NGS
China
09/28/2016 Hubei TKD Crystal Electronic Science & Technology Co Ltd
Electronics 40.3 Shanghai Stock Exchange China
09/29/2016 Takeaway.com Holding BV Internet Software & Services
369.1 Euronext Amsterdam Netherlands
09/29/2016 Tabula Rasa HealthCare Inc Software 51.6 NASDAQ United States
09/30/2016 Nutanix Inc Software 237.9 NASDAQ United States
Q4
10/05/2016 Coupa Software Incorporated Software 133.2 NASDAQ Global Select United States
10/07/2016 Everspin Technologies Inc Semiconductors 40.0 NASDAQ Global Market United States
10/27/2016 BlackLine Inc Software 146.2 NASDAQ Global Select United States
10/27/2016 Quantenna Communications Inc Communications Equipment
107.2 NASDAQ Global Select United States
11/01/2016 GDS Holdings Limited IT Consulting & Services
192.5 NASDAQ Global Market China
11/16/2016 Bravura Solutions Limited Software 110.7 Australian Securities Exchange
Australia
11/21/2016 THQ Nordic AB Software 43.3 Nordic Exchange Stockholm
Sweden
12/08/2016 Ichor Holdings Ltd Semiconductors 52.9 NASDAQ Global Select United States
12/16/2016 Trivago NV Internet Software & Services
287.2 NASDAQ Global Select Germany
Source: S&P Capital IQ with analysis by PwC
Global Technology IPO Review Full-year and Q4 2016 19
Q4 2016 Global tech IPO summary
Global IPO activity contracted in Q4 2016, but the tech IPO pipeline remains robust
Q4 2016 was one of the slowest quarters on record with just nine tech IPOs raising US$1.1 billion. The number of tech IPOs declined by 55% sequentially from 20 IPOs in Q3. Proceeds declined 79% from US$ 5.4 billion in Q3.
Figure 15: Q4 2015-Q4 2016 Global technology IPO trends
Source: S&P Capital IQ with analysis by PwC
$10,785
$769$1,480
$5,382
$1,113
22
10
14
20
9
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
0
7
14
21
28
35
42
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 20
Q4 2016 Top 5 technology listings
Nine tech IPOs were listed in Q4 2016. The Internet Software & Services subsector registered the highest proceeds with German Internet software and services company Trivago NV raising US$287 million with a NASDAQ listing.
The Software subsector dominated with three of the five top grossing IPOs. The US had two high-grossing tech IPOs in Q4 2016; China, Germany and Australia registered one each. As for stock exchanges, the US was a clear favorite with four of the five top tech IPOs listing on NASDAQ.
Table 2: IPO summary – Top 5 listings
Issue date Company Subsector Proceeds (US$ mn)
Primary exchange Domicile nation
12/16/2016 Trivago NV Internet Software & Services
287.2 NASDAQ Global Select Germany
11/01/2016 GDS Holdings Limited IT Consulting & Services
192.5 NASDAQ Global Market China
10/27/2016 BlackLine Inc Software 146.2 NASDAQ Global Select United States
10/05/2016 Coupa Software Incorporated Software 133.2 NASDAQ Global Select United States
11/16/2016 Bravura Solutions Limited Software 110.7 Australian Securities Exchange Australia
Source: S&P Capital IQ with analysis by PwC
Global Technology IPO Review Full-year and Q4 2016 21
Q4 2016 Geographic tech IPO trends
US led Q4 tech IPO activity with five of the nine listings
Compared to the first three quarters of the year, geographic
distribution was low, with only five countries participating
in Q4. Proceeds were also down. The US had the most—five
IPOs—with total proceeds of US$480 million, but the
largest IPO of Q4 was Trivago NV, of Germany, which
raised US$287 million.
Figure 16: Q4 2016 Geographic distribution
Source: S&P Capital IQ with analysis by PwC
$480
$287
$193
$111
$43
5
1 1
1
1
-
1
2
3
4
5
6
United States Germany China Australia Sweden
$0
$100
$200
$300
$400
$500
$600
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 22
United States
The US had five tech IPOs with average proceeds of only
US$96 million. Proceeds were in line with the prior three
quarters, but were disappointing due to the overall
uncertainty of the impending presidential election.
Figure 17: Q4 2016 US tech IPOs
Source: S&P Capital IQ with analysis by PwC
$4,041
$0
$694 $627$480
6
-
5
6
5
-
1
2
3
4
5
6
7
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 24
China
China had one IPO raising US$193 million in Q4 2016, however, the number of small-sized IPOs, with issue size below US$40 million, is increasing. With the move in November 2016 by the China Securities Regulatory Commission (CSRC) to speed up the approval of IPOs, it is expected there will be a higher number of tech IPOs approved and listed in 2017.
Figure 18: Q4 2016 China tech IPOs
Source: S&P Capital IQ with analysis by PwC
$551
$267
$368
$611
$193
6
3
5
9
1
$0
$100
$200
$300
$400
$500
$600
$700
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
-
1
2
3
4
5
6
7
8
9
10
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 25
Europe (excluding UK)
Europe had two IPOs, one each from Germany and Sweden.
Trivago NV from Germany was the biggest IPO for the
quarter, raising US$287 million and THQ Nordic AB
from Sweden raised US$43 million. The companies
belonged to the Internet Software & Services and Software
subsectors respectively.
Figure 19: Q4 2016 European tech IPOs (Excluding UK)
Source: S&P Capital IQ with analysis by PwC
$307 $258 $250
$3,020
$331
2
3
2
4
2
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
-
1
2
3
4
5
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 26
UK
UK markets are still languishing under the impact of Brexit.
Lack of clarity on the regulatory impact continued to
impact capital markets in Q4.
Figure 20: Q4 2016 UK tech IPOs
Source: S&P Capital IQ with analysis by PwC
$4,768
$0 $0 $0 $0
5
- - - -$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
-
1
2
3
4
5
Total proceeds (US$mn) Number of IPOsU
S$
mil
lio
ns
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 27
Asia (Excluding China)
The participation of Asian countries other than China
decreased significantly in Q4. One tech IPO outside China
was listed by an Australian company, with proceeds of
US$111 million.
Figure 21: Q4 2016 Asia tech IPOs (excluding China)
Source: S&P Capital IQ with analysis by PwC
$656
$244$167
$1,310
$111
2
4
2 2
1
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
-
1
2
3
4
5
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 28
Average proceeds
Number of IPOs and average proceeds remained below historical norms
Figure 22: Q4 2016 Average proceeds
Source: S&P Capital IQ with analysis by PwC
$372
$490
$77$106
$269
$124
11
22
10
14
20
9
-
5
10
15
20
25
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$-
$100
$200
$300
$400
$500
$600
Average proceeds Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 29
Age of company
Mature companies with proven track records listed in Q4
Of the nine IPOs in the last quarter of 2016, 67% (six) of the
companies are more than ten years old. Two companies are
eight years old while only one company, Ichor Holdings,
Ltd was less than five years old.
BlackLine Inc is the oldest and was founded in 2001.
During volatile and uncertain markets, those companies
with longevity and proven track records are in a better
position to obtain a fair valuation while those with limited
earnings history are at risk of poor market reception.
Figure 23: Q4 2016 Age of company
Source: S&P Capital IQ with analysis by PwC
11
10
15
10
12
10
4
8 8
10 10 10 10
0
2
4
6
8
10
12
14
16
Age of company Average age
Ag
e i
n y
ears
Global Technology IPO Review Full-year and Q4 2016 30
Q4 2016 Stock exchange distribution
US NASDAQ exchange led Q4 listings
With five of the nine Q4 tech IPOs being US companies, it
is not surprising that NASDAQ led listings (seven) with
proceeds of US$959 million. Two of the seven listings,
including the largest IPO of the quarter, Trivago NV from
Germany, occurred after the US presidential election when
markets began to rally.
Figure 24: Q4 2016 Stock exchange distribution
Source: S&P Capital IQ with analysis by PwC
$43$111
$959
1 1
7
-
1
2
3
4
5
6
7
8
OMX Nordic ExchangeStockholm (OM)
Australia Stock Exchange NASDAQ
$-
$200
$400
$600
$800
$1,000
$1,200
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 31
Q4 2016 Subsector distribution
Software subsector eclipses Internet Software & Services in Q4
It is not often that Internet Software & Services has only one IPO, but that was it for Q4: Trivago raising US$287 million. In Q4 2016 the Software subsector led in numbers of IPOs (four) and in proceeds (US$433 million). Most of the big-ticket Internet Software & Services subsector companies chose not to test public markets in 2016.
Figure 25: Q4 2016 Subsector distribution
S&P Capital IQ with analysis by PwC
$287
$433
$93
$193
$107
1
4
2
1 1
-
1
1
2
2
3
3
4
4
5
Internet Software &Services
Software Semiconductors IT Consulting &Services
CommunicationsEquipment
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
Total proceeds (US$mn) Number of IPOs
US
$m
illi
on
s
No
. o
f IP
Os
Global Technology IPO Review Full-year and Q4 2016 32
Table 3: Q4 2016 tech IPOs
Issue date Company Subsector Proceeds (US$ mn) Primary exchange
Domicile nation
12/16/2016 Trivago NV Internet Software & Services
287.2 NASDAQ Global Select Germany
11/01/2016 GDS Holdings Limited IT Consulting & Services 192.5 NASDAQ Global Market China
10/27/2016 BlackLine Inc Software 146.2 NASDAQ Global Select United States
10/05/2016 Coupa Software Incorporated Software 133.2 NASDAQ Global Select United States
11/16/2016 Bravura Solutions Limited Software 110.7 Australian Securities Exchange Australia
10/27/2016 Quantenna Communications Inc Communications Equipment
107.2 NASDAQ Global Select United States
12/08/2016 Ichor Holdings Ltd Semiconductors 52.9 NASDAQ Global Select United States
11/21/2016 THQ Nordic AB (publ) Software 43.3 Nordic Exchange Stockholm Sweden
10/07/2016 Everspin Technologies Inc Semiconductors 40.0 NASDAQ Global Market United States
Source: S&P Capital IQ with analysis by PwC
Global Technology IPO Review Full-year and Q4 2016 33
Key financials—Q4 2016 The average last twelve months’ (LTM) earnings for Q4
2016 was a net loss of US$20million, with only 22% of the
companies reporting net income. Of the nine tech IPOs in
the last quarter of 2016, only two companies, THQ Nordic
AB of Sweden and Ichor Holdings, Ltd of the US reported
net income. THQ Nordic AB in the Software subsector had
the highest net income of US$6.8 million.
For the full year, the percentage of companies with net
income was noticeably higher, at 58%, compared to Q4
2016. Larsen & Toubro Infotech Limited, an Indian IT
Consulting & Services company, had the highest LTM net
income in 2016, at US$147 million, while Acacia
Communications, Inc, an American semiconductor
company had the second highest LTM net income at US$51
million. Nutanix Inc of Japan and NantHealth LLC of the
US incurred the highest net losses at US$169 million and
US$91 million, respectively.
Software companies were partially responsible for pulling
down the average LTM net income with three (43%) of the
seven loss-incurring companies from that subsector. In
2016, 42% companies reported LTM net losses compared to
37% of 2015.
The only company that went public in the Internet Software
& Services subsector, Trivago NV, recorded the highest
average revenue overall at US$717 million, which also made
it the subsector with the highest average revenue.
The Semiconductor subsector reported the second highest
average revenue—US$183 million—from two listings, while
the IT Consulting & Services subsector posted average revenue of US$138 million from one listing. The Software
subsector reported the lowest average revenue, of US$100 million, from four listings in Q4 2016.
Figure 26: Full-year and Q4 2016 technology IPOs – Net income
Source: S&P Capital IQ with analysis by PwC
22%
78%
Q4 2016
Positive net income Net loss
58%
42%
Full-year 2016
Positive net income Net loss
Global Technology IPO Review Full-year and Q4 2016 34
Figure 27: Q4 2016—Average LTM revenue
Figure 28: Q4 2016—Average LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
$117
$717
$138$183
$100
$251
1
1
12
4
9
0
2
4
6
8
10
12
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
CommunicationsEquipment
Internet Software &Services
IT Consulting & Services Semiconductors Software All sectors
No
. o
f IP
Os
LTM revenue No. of IPOs
In U
S$ m
illi
on
s
$1
($29)
$23
$4
($7)($2)
11
1 2
4
9
0
2
4
6
8
10
12
-$40
-$30
-$20
-$10
$0
$10
$20
$30
CommunicationsEquipment
Internet Software &Services
IT Consulting & Services Semiconductors Software All Sectors
No
. o
f IP
Os
LTM EBITDA No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 35
Figure 29: Q4 2016—Average LTM net income
Source: S&P Capital IQ with analysis by PwC
($2)
($55)
($34)
($8)
($18)
($23)
1 1 1
2
4
9
0
2
4
6
8
10
12
$(60.0)
$(50.0)
$(40.0)
$(30.0)
$(20.0)
$(10.0)
$-
CommunicationsEquipment
Internet Software &Services
IT Consulting & Services Semiconductors Software All sectors
No
. o
f IP
Os
LTM Net income No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 36
Figure 30: Q4 2016—Average total debt
Source: S&P Capital IQ with analysis by PwC
$6
$28
$362
$35 $30
$92
1 1 1
2
4
9
0
2
4
6
8
10
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
$400.0
CommunicationsEquipment
Internet Software &Services
IT Consulting & Services Semiconductors Software All sectors
No
. o
f IP
Os
LTM debt No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 37
Figure 31: Q4 2016—Average Enterprise Value
Source: S&P Capital IQ with analysis by PwC
$817
$2,857
$1,630
$342
$756
$1,280
1 1 1
2
4
9
0
2
4
6
8
10
$-
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
CommunicationsEquipment
Internet Software &Services
IT Consulting & Services Semiconductors Software All sectors
No
. o
f IP
Os
Enterprise value No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 38
Q4 2016 Technology IPO listings: Valuation metrics
The overall valuation of technology IPOs marginally
increased in Q4 2016 compared to Q4 2015. IT Consulting
& Services and Software led the valuation metrics with an
average with 12x and 8x, respectively.
The average EV/LTM revenue for listed IPOs in Q4 2016
was 5.1x, higher than 4.8x in Q4 2015. The IT Consulting &
Services subsector had only one listing with an enterprise
value of US$1,630 million and revenue of US$137.5 million,
thus making the EV/LTM revenue 11.9x.
Software companies posted an average revenue multiple of
7.5x, followed by Communications Equipment at 7.0x. The
Semiconductors subsector came last at 1.9x.
The Communications Equipment subsector led with the
highest average EV/LTM EBITDA multiple of 1634.6x,
followed by the Semiconductors subsector at 77.7x and IT
Consulting & Services subsector at 72.1x.
Figure 32: Q4 2016 EV/LTM revenue
Source: S&P Capital IQ with analysis by PwC
7.0x
4.0x
11.9x
1.9x
7.5x
5.1x
1 1 1
2
4
9
0
2
4
6
8
10
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
CommunicationsEquipment
InternetSoftware &Services
IT Consulting &Services
Semiconductors Software All sectors
No
. o
f IP
Os
EV/LTM revenue No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 39
Figure 33: Q4 2016 EV/LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
1634.6x
NM72.1x
77.7x
NM NM
1 1 1
2
4
9
0
2
4
6
8
10
0.0x
200.0x
400.0x
600.0x
800.0x
1,000.0x
1,200.0x
1,400.0x
1,600.0x
1,800.0x
CommunicationsEquipment
Internet Software &Services
IT Consulting & Services Semiconductors Software All sectors
No
. o
f IP
Os
EV/ LTM EBITDA No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 40
Top three subsectors in Q4 2016
Software
The Software subsector registered four IPO listings in Q4 2016, with total proceeds of US$433 million and an average LTM revenue of US$100 million. The subsector witnessed negative growth year to year (down 55%) and quarter to quarter (down 60%). Bravura Solutions Limited of Australia grossed the highest proceeds with US$134 million. Average LTM EBITDA for Q4 2016 was US$7 million compared to US$31 million in Q4 2015. Average net income was actually a loss of US$18 million, which has been a persistent trend from the previous quarter as well as since Q2 2015. Average debt declined 54% compared to Q3 2016. EV/LTM revenue decreased from 12x in Q4 2015 and 9.8x in Q3 2016 to 7.5x in Q4 2016. EV/LTM EBITDA declined from a positive 85.3x to a negative 105.7x year on year.
Figure 34: Software – LTM revenue
Source: S&P Capital IQ with analysis by PwC
$223
$21
$199
$253
$100
4 2
6
10
4
0
2
4
6
8
10
12
$0
$50
$100
$150
$200
$250
$300
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM revenue No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 41
Figure 35: Software – LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
$31
($11)
$21
$4
($7)
4
2
6
10
4
0
2
4
6
8
10
12
($15)
($10)
($5)
$0
$5
$10
$15
$20
$25
$30
$35
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM EBITDA No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 42
Figure 36: Software – LTM net income
Source: S&P Capital IQ with analysis by PwC
($4) ($4)
($11)
($19)($18)
4
2
6
10
4
0
2
4
6
8
10
12
($20)
($18)
($16)
($14)
($12)
($10)
($8)
($6)
($4)
($2)
$0
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM Net income No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 43
Figure 37: Software – EV
Source: S&P Capital IQ with analysis by PwC
$2,675
$320
$1,627
$2,468
$7564 2
6
10
4
0
2
4
6
8
10
12
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
Enterprise value No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 44
Figure 38: Software – Total debt
Source: S&P Capital IQ with analysis by PwC
$0 $2
$178
$65
$30
4
2
6
10
4
0
2
4
6
8
10
12
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
Total debt No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 45
Figure 39: Software – EV/LTM revenue
Source: S&P Capital IQ with analysis by PwC
12.0x
15.2x
8.2x
9.8x
7.5x
4
2
6
10
4
0
2
4
6
8
10
12
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
EV/LTM revenue No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 46
Figure 40: Software – EV/LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
85.3x
NM
77.6x
587.6x
NM
4 2
6
10
4
0
2
4
6
8
10
12
0.0x
100.0x
200.0x
300.0x
400.0x
500.0x
600.0x
700.0x
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
EV/LTM EBITDA No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 47
Semiconductors
The average revenue for semiconductors companies was
US$183 million in Q4 2016, an increase of 24% on a
quarter-to-quarter basis.
Average LTM EBITDA declined by 70% quarter to quarter,
from US$15 million to US$4 million in Q4 2016.
Semiconductor EV decreased 80% quarter to quarter, from
US$1.7 billion in Q3 2016 to US$342 million in Q4 2016.
LTM net income declined from US$13 million in Q3 2016
to a net loss of US$8 million in Q4 2016.
Total debt for Q4 2016 increased by 260%, from US$10
million in Q3 to US$35 million in Q4.
In Q4, the subsector’s valuation multiple of EV/LTM
revenue declined to 1.9x from the 11.5x of Q3 2016.
EV/LTM EBITDA also sequentially declined to 77.7x in Q4
2016 from 113.4x in Q3 2016.
Figure 41: Semiconductors – LTM revenue
Source: S&P Capital IQ with analysis by PwC
$529
$276
$147$183
2 2 2 2
-
1
2
3
4
$0
$100
$200
$300
$400
$500
$600
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM revenue No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 48
Figure 42: Semiconductors – LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
$17
$57
$15
$40
2 2 2 2
-
1
2
3
4
$0
$10
$20
$30
$40
$50
$60
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM EBITDA No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 49
Figure 43: Semiconductors – LTM net income
Source: S&P Capital IQ with analysis by PwC
$14
$51
$13
($8)0
2 2 2 2
-
1
2
3
4
($20)
($10)
$0
$10
$20
$30
$40
$50
$60
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM Net income No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 50
Figure 44: Semiconductors – EV
Source: S&P Capital IQ with analysis by PwC
$345
$1,279
$1,689
$342
0
2 2 2 2
-
1
2
3
4
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
Enterprise value No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 51
Figure 45: Semiconductors – Total debt
Source: S&P Capital IQ with analysis by PwC
$109
$3$10
$35
0
2 2 2 2
-
1
2
3
4
$0
$20
$40
$60
$80
$100
$120
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
Total debt No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 52
Figure 46: Semiconductors – EV/LTM revenue
Source: S&P Capital IQ with analysis by PwC
0.7x
4.6x
11.5x
1.9x
0
2 2 2 2
-
1
2
3
4
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
EV/LTM revenue No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 53
Figure 47: Semiconductors – EV/LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
20.8x 22.6x
113.4x
77.7x
0
2 2 2 2
-
1
2
3
4
0.0x
20.0x
40.0x
60.0x
80.0x
100.0x
120.0x
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
EV/LTM EBITDA No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 54
Internet Software & Services
The Internet Software & Services subsector registered only
one listing with proceeds of US$717 million in Q4 2016.
That one IPO led to average revenue growth of 446%
quarter to quarter, from US$131 million in Q3 to US$717
million in Q4. However, the year-to-year average LTM
revenue declined 34%.
Average LTM EBITDA for Q4 2016 was a net loss of US$29
million compared to net income of US$309 million in Q4
2015. The average for Q4 2016 was a net loss of US$55
million, compared to an average net loss of US$26 million
in Q4 2015.
EV/LTM revenue (4x) declined both quarter on quarter
(5.2x) as well as year on year (4.9x). EV/LTM EBITDA
declined drastically to a negative 97.8x from 1,083.7x of
Q3 2016.
Figure 48: Internet Software & Services – LTM revenue
Source: S&P Capital IQ with analysis by PwC
$1,082
$52$96
$131
$717
13
3 3 3
1
0
3
6
9
12
15
$0
$200
$400
$600
$800
$1,000
$1,200
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM revenue No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 55
Figure 49: Internet Software & Services – LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
$309
$4
($24)
$1
($29)
13
3 3 3
1
0
3
6
9
12
15
($50)
$0
$50
$100
$150
$200
$250
$300
$350
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM EBITDA No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 56
Figure 50: Internet Software & Services – LTM net income
Source: S&P Capital IQ with analysis by PwC
($26)
$4
($28)
($14)
($55)
13
3 3 3
1
0
3
6
9
12
15
($60)
($50)
($40)
($30)
($20)
($10)
$0
$10
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
LTM Net income No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 57
Figure 51: Internet Software & Services – Enterprise value
Source: S&P Capital IQ with analysis by PwC
$5,286
$351
$1,526
$686
$2,857
13
3 3
3
1
0
3
6
9
12
15
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
Enterprise value No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 58
Figure 52: Internet Software & Services – Total debt
Source: S&P Capital IQ with analysis by PwC
$2,390
$1$8 $18 $28
13
3 3 3
1
0
3
6
9
12
15
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
Total debt No. of IPOs
In U
S$ m
illi
on
s
Global Technology IPO Review Full-year and Q4 2016 59
Figure 53: Internet Software & Services – EV/LTM revenue
Source: S&P Capital IQ with analysis by PwC
4.9x
6.8x
15.8x
5.2x
4.0x
13
3 3
3 1
0
3
6
9
12
15
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
Os
EV/LTM revenue No. of IPOs
In m
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 60
Figure 54: Internet Software & Services – EV/LTM EBITDA
Source: S&P Capital IQ with analysis by PwC
17.1x85.5x
NM
1083.7x
NM
13
3 3 3
1
0
3
6
9
12
15
0.0x
200.0x
400.0x
600.0x
800.0x
1000.0x
1200.0x
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
No
. o
f IP
O's
EV/LTM EBITDA No. of IPOs
In M
ult
iple
s
Global Technology IPO Review Full-year and Q4 2016 61
Methodology The Global Technology IPO Review for Q4 and full-year 2016 is based on PwC’s analysis of transaction data extracted from S&P Capital IQ. The analysis considers IPOs across all
countries worldwide during the period 1 October 2016 to 31 December 2016 (Q4), 1 January 2016 to 31 December 2016 (full-year) and from 2010-2016. Financial data was also
obtained from S&P Capital IQ.
The definition of the Technology sector is based on the S&P Capital IQ database industry classifications and includes the following subsectors:
Internet Software & Services
IT Consulting & Services
Professional Services (e.g., Application Software, Software Solutions)
Semiconductors
Software
Computers & Peripherals
– Computers, Computers Peripheral Equipment
– Computers, Storage Device Manufacturing
Electronic Computers Manufacturing (“Electronics”)
Communications Equipment
Only IPOs with issue size greater than US$40 million were included in the analysis.
All monetary amounts are in US dollars unless otherwise indicated.
LTM – Last 12 months
Most figures are rounded to one decimal.
Global Technology IPO Review Full-year and Q4 2016 62
For more information
If you would like to discuss how these findings might impact your business or your future strategy, please reach out to any of our technology industry leaders listed below.
Raman Chitkara
Global Technology Leader
Phone: 1 408 817 3746
Email: [email protected]
Rod Dring – Australia
Phone: 61 2 8266 7865
Email: [email protected]
Estela Vieira – Brazil
Phone: 55 1 3674 3802
Email: [email protected]
Christopher Dulny – Canada
Phone: 1 416 869 2355
Email: [email protected]
Jianbin Gao – China
Phone: 86 21 2323 3362
Email: [email protected]
Pierre Marty – France
Phone: 33 1 5657 58 15
Email: [email protected]
Werner Ballhaus – Germany
Phone: 49 211 981 5848
Email: [email protected]
Sandeep Ladda – India
Phone: 91 22 6689 1444
Email: [email protected]
Masahiro Ozaki – Japan
Phone: 81 3 5326 9090
Email: [email protected]
Hoonsoo Yoon – Korea
Phone: 82 2 709 0201
Email: [email protected]
Ilja Linnemeijer – The Netherlands
Phone: 31 88 792 4956
Email: [email protected]
Yury Pukha – Russia
Phone: 7 495 223 5177
Email: [email protected]
Mark Jansen – Singapore
Phone: 65 6236 7388
Email: [email protected]
Jass Sarai – UK
Phone: 44 0 1895 52 2206
Email: [email protected]
Pierre-Alain Sur – US
Phone: 1 646 471 6973
Email: [email protected]
Alan Jones – US (Deals partner)
Phone: 1 415 498 7398
Email: [email protected]
About PwC’s technology institute
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