Venture Backed IPO Activity Ends 2012 With a Whimper

Venture-backed IPOs ended 2012 on a slow note with eight deals completed during the fourth quarter in the United States, leading the full-year to look quite similar to 2011.

The quarter’s volume was down 27% from a year ago, and the eight offerings raised $1.4 billion, down 50% from last year, according to a report from the National Venture Capital Association and Thomson Reuters, publisher of this blog.

The year’s conclusion proved a stark contrast to its beginning, when enthusiasm over the long-awaited Facebook IPO helped raise expectations. But this seminal social-networking deal turned into a dud and set the tone for the months to follow.

The year saw 49 deals completed, compared with 51 in 2011, the report found. In total venture backed startups raised $21.5 billion, a big increase from $10.7 billion they raised last year. But without the $16 Facebook deal, dollars raised were off 49%.

The first two quarters of the year saw the greatest volume, with 19 deals in the first quarter and 12 in the second, when Facebook launched. Volume fell to 10 in the third and 8 in the fourth.

Technology companies kept up their dominance in the fourth quarter. Five of the quarter’s IPOs were technology deals, including Workday, the largest deal of the three month period, which raised $733 million. One company was China-based, YY Inc., an online game community, and two offerings were from biotechnology companies.

Looking ahead to 2013, 27 venture-backed companies are on file with the Securities and Exchange Commission, the report said.

Photo courtesy of Shutterstock.


  • There’s a lot to be extrapolated here about Facebook’s impact on the IPO scene. Had it not priced so high/gone so wrong, VCs might have had opportunities to launch a slew of social IPOs.

  • It is always hard to know “what if.” But Facebook, from our vantage point today, seems to have had a powerful impact. It would be interesting to do a survey of investment bankers and VCs.

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