There's no shortage of initial public offering news from startups in the D.C. area lately. Friday saw the debut of education technology company 2U on the stock market, and will soon be joined by energy tech company Opower. A new report finding that the U.S. IPO market has been growing extremely rapidly so far this year fits right into the story of the two local startups filing for for nine figure IPOs.
The 68 U.S. IPOs this year, representing $11.6 billion are just the beginning it seems. According to the report, put together by Ernst & Young (always referred to as EY on its' website), another 25 have also registered in March.
"After years of consolidation, the US markets are entering a period of rapid growth, in turn investor’s sense the market appetite is there to make land grabs for disruptive technologies and innovative companies," said Jackie Kelley, global IPO leader for EY.
In terms of the biggest growth, it's biological and pharmaceutical companies leading with 23 deals. Locally, biotechnology firms like K2M and Glycomimetics are jumping into the stock market and there's plenty of reason to think that more will be forthcoming throughout the year. Of all the IPOs launched or in the making right now in
"Investors seeking out companies that are looking to innovate for long term growth are definitely the sign of a strong IPO market," Kelley said. "Health care, pharmaceuticals, biotech, technology, and energy companies in particular will drive deal activity, for the remainder of 2014."
As impressive as the numbers are on their own, it's the fact they represent a more than doubling of money coming from IPOs for the same period last year that really stands out. In the U.S., the IPO values are 106 percent higher for the same period last year. If, as EY predicts, the market for IPOs keeps this up, it's easy to imagine an even greater interest from investors in startups looking to go public.
"We expect continued momentum in Q2, with a steady flow of health care, technology and energy companies in the pipeline," Kelley said.
Of course, going public with a huge IPO doesn't mean much if the company can't start generating some revenue, but a little optimism about the climate for a startup planning to go to Wall Street is perhaps understandable. The D.C. tech scene will probably be well represented, growing the way it is and with an ever larger amount of encouragement via local government incentives.
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