Renaissance Capital's 3Q17 US IPO Market Review

IPO Market Enters Fourth Quarter with the Wind at its Back
The US IPO market saw 29 IPOs raise $4.1 billion in the third quarter, a drop from the prior year period. Small-cap health care companies, mostly biotechs, made up almost half of all IPOs. Technology IPOs fell by 70%. Private equity brought few large offerings, and quarterly proceeds settled to the lowest level in six quarters. While activity was low, returns were extraordinarily high, as the average deal gained 36%. After a slow summer, the quarter gained momentum post-Labor Day. Almost half of the 29 IPOs came in the final two weeks of the quarter. In stark contrast to the 2Q17 that ended with two high-profile tech flops, the 3Q ended with TV streaming platform Roku rocketing 90%, confirming there is still demand for high-growth tech stocks. Monthly filings hit a two-year high in September, and technology is now the largest component of IPOs on file, with CarGurus, MongoDB and a few large Asian offerings set to kick off the 4Q17 deal calendar. Despite companies pushing back their IPO plans in the 3Q, the 2017 IPO count (106) has already eclipsed 2016 (105) with a quarter left to go.

View our 3Q17 US IPO Review