US tech IPOs on track for record year in money raised, reaching $17.1bn in 2019 H1 – Linklaters reports

  • 2019 H1 US tech IPOs stand at $17.1bn, over 75% of the previous full year record in history
  • The previous full year record for money raised by US tech IPOs is $22.5bn in 2000
  • Five US tech IPOs have raised more than $1bn each this year, compared to none above $1bn in 2018

According to analysis from Linklaters, the global law firm, in 2019 H1 US tech firms have raised $17.1bn, on track to exceed the previous full year record of $22.5bn raised by US tech IPOs in the year 2000.

The surge in fundraising by US tech IPOs was driven by a number of companies valued over $1bn, or unicorns. The research shows that 10 US tech companies valued above $1bn have raised $15.6bn this year so far, more than doubling last year’s figure; in 2018 there were 19 US tech firms valued above $1bn which raised $5.9bn.

Of the 10 US tech unicorns in 2019, five have raised more than $1bn each: Uber ($8.1bn), Lyft ($2.3bn), Pinterest ($1.4bn), TradeWeb Markets ($1.1bn) and Chewy ($1.0bn).* In comparison, there were no US tech IPOs which raised over $1bn in 2018.

Analysis of 2019 H1 beyond the US market found that there has been only one other tech IPO which raised over $1bn this year, with Italy’s unicorn payment group Nexi raising $2.3bn on the Milan stock exchange in April. In comparison European tech companies raised $3.6bn in 2018.
Overall, Asia has seen slower IPO activity among tech unicorn companies compared to 2018, which was a record year in terms of both the number (21) and total amount raised ($29.4bn). This was predominantly driven by Chinese companies such as China Tower ($6.9bn) and Xiaomi ($4.7bn). In 2019, there are only 3 unicorns in Asia, all from China, having raised only $637m in total.

Jeff Cohen, a New York capital markets partner at Linklaters, said:

“Technology IPOs are on track for a record year of fundraising, set to surpass the previous milestone set in 2000 at the height of the first internet surge. The variety, novelty and disruptiveness of the technologies underlying these IPOs are powerful indicators of sustained strength."
“Regulatory changes in the U.S. have both enabled companies to stay private for longer, allowing them to build out their businesses away from public markets, and eased the path to IPO once embarked upon.  European and Asian technology companies have likewise felt the pull of the U.S. exchanges, and European and Asian exchanges are alert to the challenge posed by the U.S. exchanges.  For now, the technology IPO boom appears set to continue through the second half of 2019 and beyond.”

According to Bertrand Sénéchal, Capital Markets partner at Linklaters Paris:

“France is at the forefront in a similar area: the biotechnologies sector. Genfit** had its IPO in March, and Cellectis, DBV, Erytech** and Innate Pharma are about to follow suit. As with Tech companies, issuers are heading towards a deeper market, which is more accustomed to “ups & downs” proper to those societies, who can have huge prices variations, and where failures are well-offset by great successes.”    
Notes

*The analysis has been conducted by Linklaters using data from CB Insights. Linklaters has removed any direct listings for tech companies valued above $500m (for example Slack technologies and Spotify).

** Linklaters Paris advised the introductory banks for Erytech and Genfit.