Emergence Study Shows B2B Companies Outperform B2C Post IPO

First it was Model N. Then Marin Software.

Suddenly 2013 is looking promising for venture-backed enterprise IPOs.

This is a good thing for the venture industry’s bottom line. The performance of B2B companies post IPO tends to be better than the performance of companies with a consumer focus, at least according to a study from Emergence Capital Partners.

Emergence, which has a big focus on SaaS and services startups, looked at 103 IPOs from 2004 to 2010 and the results of its findings are displayed below in the chart it put together.

In short what it found was that B2B companies tend to outperform B2C companies post IPO.  Once a business customer puts in a product or service, it has a reluctance to replace it. Therefore B2B business models can be steadier and more predictable.

IPO activity from this year seems to expect the trend to continue.

Model N had a nice outing last week. It was the first enterprise software deal of the year and its stock gained almost 29% on day one. The company provides revenue-management software and offered 6.7 million shares at $15.50, which was above the projected range of $12.50 to $14.50. It’s shares trade at $19.12 today.

Marin also scored big last week. Its stock was priced at $14, above the $11 to $13 target range, and the company increased the shares it sold to 7.5 million from 7 million. Marin is developing online ad management technology. The stock presently sells for $15.78.

Below is the Emergence chart (graphic above courtesy of Shutterstock).