After a slow start to initial public offerings in the first quarter of 2015, overall IPO activity began to pick up in the second quarter. However, concerns about turmoil in Greece, market declines in China and questions about what the Federal Reserve will do with interest rates conspired to limit the gains as the quarter progressed.
There were a number of significant internet and technology company IPOs in 1H 2015, including Box (finally, after a long delay), Etsy, Shopify and FitBit. While 1H 2015 generated about half the number of deals as 1H 2014, dollars raised declined by about 30%, reflecting the larger size of some of the 2015 transactions that did manage to get priced.
The initial public offering markets continue to be volatile, which led a number of companies to push to price in the first part of the third quarter in an effort to get out before further issues in Greece could derail the markets. We believe that the third quarter will likely have at least the same level of priced deals as the second quarter, based on both the strong activity in July and the backlog of deals at the SEC. Entering the traditional August slowdown, September has the potential to be a strong month. Overall, economic activity apppears strong to most economists, leading to optimism that the remaining half of this year will continue to present IPO opportunities. There is, however, significant uncertainty in the global economy, which may lead to continued volatility in the markets.
We also need to acknowledge the continued impact of the private funding markets, where significant valuations and large rounds have caused some of the most high-profile IPO candidates to delay the IPO process in favor of staying private. It remains to be seen how long this trend will continue and what the ultimate impact will be on the IPO market over the coming months.
We are excited to present our editorial content this month, which acknowledges the combination of volatility and potential strength in the IPO pipeline. The following pages discuss the steps that aspiring IPO candidates should be taking now in order to be fully prepared to take advantage of favorable market openings. We look forward to continuing the discussion over the coming months.
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