Exits from IPO Pipeline shift from IPOs to M&A as 2014 ends

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Nasdaq/Christopher Galluzzo

CEO Nick Woodman and GoPro were among the raft of IPOs early this year, but exits shifted towards M&A in the second half.

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Cromwell Schubarth

Senior Technology Reporter- Silicon Valley Business Journal

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A deluge of tech IPOs looked to be in the cards when CB Insights issued its annual IPO Pipeline report last December.

While that played out early in the year, action shifted to exits via mergers and acquisitions in the second half of the year, according to an update issued this week by the New York-based investment research firm.

The IPO Pipeline includes tech companies with valuations — real or rumored — of greater than $100 million which CB Insights determines are showing significant momentum. About 43 percent of the companies in the 2014 forecast exited, raised additional financing or both since the list was issued.

In the first half of the year, exits via IPO and those via M&A were relatively even, which is unusual given that the general rule of thumb is that about 80 percent of venture-backed companies hit the turnstiles via a sale.

Seventeen in the CB Insights PIpeline went public in the first half and 19 were sold. Only five have gone public so far in the second half and 26 have been acquired.

A number of companies that disclosed plans to go public early in the year postponed them for many months and remain on hold, notably Box and Good Technology in Silicon Valley.

Despite the slowdown, there have been more IPOs in the region in 2014 than in any year since the dot-com boom.

But the pace clearly slowed in the second half and M&A pros, as I reported Thursday, believe there will be an explosion of acquisitions next year.

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Cromwell Schubarth is the Senior Technology Reporter at the Silicon Valley Business Journal.