Tech IPO Frenzy may roll into 2014

Tech IPO wave may be getting frothy as it rolls into 2014

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CB Insights

Funding of venture-backed companies in the IPO pipeline hit its highest level in 2013 since the dotcom bubble of the 1990s.

Cromwell Schubarth

Senior Technology Reporter- Silicon Valley Business Journal

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There may be signs of frothiness in the latest Tech IPO Pipeline report from venture investment research firm CB Insights.
The number of companies poised to go public in 2014 is more than a third bigger than it was in 2013, a year that has already seen the most tech IPOs of the past 10 years.
The number of tech companies that have raised more than $100 million — a number that would normally put them on track for an imminent IPO — is also up by about 25 percent to 590, the report shows. There are 308 companies in California with that amount of money raised, up by about 38 percent from last year.
Those and other numbers in the report could be signals of possible overheating, according to CB Insights CEO Anand Sanwal.
"There could be a bit of frothiness in the numbers," he told me. "We now count 25 pre-exit venture-backed companies with valuations at $1 billion or more. There have only been 45 billion-dollar exits since 2004, so that is a very big number."
The average amount raised by the companies in the IPO Pipeline for next year has also jumped by 19 percent to $101 million.
"There are more investors chasing what are considered to be potential winners than in the past and that is raising the amount that companies are able to raise," Sanwal said.
Companies in the IPO pipeline raised $12.63 billion in 2013, the most since the dotcom bubble of the 1990s, CB Insights said. This came despite the number of deals in the group remaining relatively flat for the past three years at between 406 and 409.
Some other highlights from the CB Insights report include:
— Silicon Valley and the Bay Area accounted for 18 of the 25 "billion-dollar babies," including Airbnb, Appnexus, Automattic (maker of WordPress), Box, Deem (previously known as Rearden Commerce),Dropbox, Evernote, Good Technology, GoPro, Jawbone, Lending Club, Palantir Technologies, Pinterest, Pivotal, Pure Storage, Square, SurveyMonkey and Uber Technologies.

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Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.

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