Venture Backed IPO Market Rebounds In 4Q But Not Enough To Reverse Down Year; M&A Still Solid

Here is confirmation of what most of you in the venture world already know. The market for venture-backed IPOs rebounded in the fourth quarter, but not enough to match the vigorous final three months of 2010.

That helped lead all of 2011 down 31% in volume and 41% in dollar value from a year ago, not a strong performance. The tally comes from the National Venture Capital Association and Thomson Reuters, publisher of this blog, which also found a fourth-quarter slump in M&A activity.

Quarterly transactions involving venture-backed companies fell 5% and aggregated deal value was off 34%. However, the bright spot in the year-end report released Monday was that for all of 2011, M&A deals were down just 2% from the record total of 2010.

Here are the details):

  • Eleven venture-backed companies went public in the fourth quarter, a 120% rebound from the third quarter, but down 67% from a year ago. Dollar value was $2.6 billion, or down 34% from last year. Seven IPOs were information technology companies. Three were health care related. The largest IPO of the quarter came from Zynga.
  • The full year saw 52 venture backed IPOs. This compares to 75 in 2010. For 2011, the value of the offerings came to $9.88 billion, up 41% from $7.01 billion in 2010. Thirty-nine companies were from the United States and 13 from abroad. The Russian search company Yandex held the largest offering of the year.
  • Ninety-two M&A transactions took place in the fourth quarter compared with 97 in the fourth quarter of 2010. Average deal size among those with disclosed values was $152 million, up 4%. Sixty-one of the companies came from the information technology industry.
  • The year saw 429 transactions compared with 436 in 2010 (Find the link to the study on this page).