With Second Wave of IPOs, Know the CVCs That Will Benefit
It was only back in March that we reported a wave of IPOs with corporate venture backing. Now that wave has transformed into a veritable deluge, but why?
Huya, the China-based live-streaming platform spun off by social media company YY, filed on April 9, to raise up to $200 million in an initial public offering in the US. Meanwhile, Pivotal Software, the US-based software development services provider with over 319 corporate subscribers for its service, set the terms for an initial public offering on April 9, that will raise $530 million at the top of its range. General Electric will sell up to $62 million of shares. And US-based anti-aging therapy developer Unity Biotechnology filed on April 6, for an $85 million IPO that will allow pharmaceutical research firms WuXi PharmaTech and Mayo Clinic to exit.
“Despite pure exit activity coming in relatively subdued through the first part of the year, we actually see ample opportunity for VC-backed public offerings to pick up steam as we continue to progress through the next few quarters of 2018,” Nizar Tarhuni, associate director of analysis at PitchBook, told INV Global. “ Late-stage capital is certainly available to continue funding such companies, however, we see a plethora of increasingly mature companies that have been able to build cash-efficient business models that are attractive to institutional shareholders on the public side.”
According to data from Ernst & Young, there were 44 IPOs in the Americas in the first quarter of 2018 raising $15.4 billion collectively, an increase of 29% in terms of volume and 22% by proceeds compared to the same time last year.
Huya raised $462 million from Tencent just last month at a valuation of $1.2 billion. Formed by YY in 2014, Huya runs an online platform with almost 87 million monthly active users where gamers can live-stream their game play.
GE paid $104 million for a 10% stake in Pivotal when it was established as a separate company in 2013 and provided a further $45.8 million for a $653 million round in 2016 that valued the company at $2.8 billion. Ford also invested $182 million in the 2016 round while Dell EMC subsidiary VMware supplied $20 million.
