"After an historic 2014, the first quarter of IPO activity has seen a notable dropoff. Thirty-four IPOs raised $5.4 billion, according to a report out today from Renaissance Capital."
That's half the number of IPOs and roughly half the dollar amount raised in Q1 2014, making it the least active quarter by IPO count since Q1 2013.
- The good news: Biotech IPOs continued strong, accounting for roughly half of all the deals.
- The bad news: Technology and Energy saw a drop off.
What happened? The drop in energy IPOs is no surprise, but tech IPOs dropped off partly because so much private funding was available that valued the companies at high levels.
That left little incentive for many companies to go public.
In Tech, there's too much (private) money chasing too few opportunities.
But the public IPO market has a certain amount of discipline, and they are usually reluctant to bid things up to the moon.
Read more: This has led to a problem: recent high-profile tech deals like Box, HortonWorks and New Relic went public at levels that were below their most recent private funding rounds.