That’s the drastically oversimplified takeaway from a review of aftermarket performance for venture-backed companies that went public this past year.
Among VC-funded technology offerings that debuted on U.S. exchanges during the past twelve months, not a single one of the top five performers was a consumer Internet company, according to Thomson Reuters data. Rather, all five were enterprise software and service providers, and all have shares that are up 65% or more from their initial offering prices.
The top performer, in dollar terms, was Splunk by a long shot. The San Francisco-based provider of software for businesses to analyze massive quantities of machine data, went public in April at $17 a share and is now close to $30. That’s not the biggest percentage gain, but Splunk went public at a very high valuation to begin with ($1.6 billion). It shot up in first-day trading, and though it’s given back some gains, those who bought at the IPO price are still seeing some enviable returns.
The other four on the list are:
Tangoe: The provider of systems for enterprises to manage telecommunications services and billing went public last July. It stock priced at $10 and is currently trading around $20.
Guidewire Software: The developer of software for insurance providers went public in January. Its stock priced at $13 and is currently trading around $28.
Synacor: The provider of content delivery technology went public in February. Its stock priced at $5 and is currently trading around $12.
Demandware: The developer of e-commerce software went public in March. Its stock priced at $16 and is currently trading around $27.
Besides a focus on enterprise services, it’s unclear what it takes to make it to the top five list. Offering size doesn’t appear to have much impact, given that Splunk was one of the past year’s larger offerings, and Synacor was one of the smallest. Nor does profitability seem to be much of a factor. Of the top five, only Guidewire and Synacor are profitable.
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