Tech companies look to ride the IPO wave
King and A10 Networks announced plans to list in the last couple of days
The latest wave of fast-growing technology companies announcing that they’re going to list a chunk of their business on stock markets around the world is no coincidence.
The largest IPO of the year came yesterday from Candy Crush creator, King, which revealed that it was seeking $500 million (£300 million) through a listing on the New York Stock Exchange (NYSE). Meanwhile, network equipment maker A10 Networks announced today that it is seeking $100 million (£60 million) through an IPO, also on the NYSE.
The time for fast-growing technology companies to go public is now, according to investors at two leading venture capital firms.
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Pawel Chudzinski, a partner at Point Nine Capital in Berlin, told Techworld: “I think the windows for IPOs is now. The whole thing is cyclical…proven by history, there are windows for tech companies and then they close and then they open again. I think right now is a time when the investor community in general is hungry for tech companies.”
Maximilian Claussen, a tech investor at European venture capital firm Earlybird, told Techworld: “IPOs come in waves. There’s a certain appetite among investors at the moment. I think there is a window opening up again."
Beyond King and A10 Networks, there are countless other technology firms queuing up to list on markets around the world. London firms rumoured to be eyeing IPOs include music streaming platform Spotify, food delivery service JustEat, entertainment identifier Shazam and mobile gaming company Mind Candy.
Indeed, the London Stock Exchange (LSE) saw a record number of tech IPOs in 2013 with 36 companies raising over a £1 billion.
Marcus Stuttard, who heads up the UK Primary Markets and the Alternative Investment Market (AIM) at the 213-year-old Exchange, told Techworld last month that 2014 is set to be just as successful. “We would expect the sorts of volumes that we have seen over the last 18 months to continue,” he said. “Our forward look at the pipeline shows that it remains strong and I’m aware of companies [that plan to list] on both AIM and the main market so I’m very confident.”
One commentator in daily business newspaper CityAM said today: "This spring is shaping up to be a busy time for the London listings market, with a logjam of companies waiting to use its facilities to raise finance."