The National Venture Capital Association (NVCA) today released a report on the exit activities of member venture firms. They reported just 10 IPOs among venture backed companies, raising $540.8 million, compared to 10 deals that generated $720.7 million in Q1 of 2005.
The number of M&A transactions was down from 46 last year to 43 this year, though the exit values increased in total from $4,364.9 million to $4,817.4 million.
Mark Heesen, president of the NVCA, expressed unease regarding the poor IPO activity:
We are becoming increasingly concerned about the economic implications of the lackluster IPO market for venture-backed companies. Although we are bolstered by the continued strength of the acquisitions market, we can not rely on it as the only avenue to produce above average returns for the venture industry. Our economy depends on a strong US capital markets system to create jobs and revenues here. And while the companies that have gone public during the past year have seen their stock prices rise, their successes have not yet translated into a marked improvement in IPO activity. This situation needs to show signs of improvement before year end or we will begin to feel the effects on a much broader scale.
To view the entire NVCA report, click here.
The report notes:
The largest IPO of the first quarter came from the Life Sciences sector, Altus Pharmaceuticals, Inc.’s [Nasdaq: ALTU] $105.0 million offering. Altus Pharmaceuticals was backed by Warburg Pincus, U.S. Venture Partners, CMEA Ventures, China Development Industrial Bank, and Nomura International.
The Technology sector had three companies raise a total of $231.1 million. The largest IPO in the Technology sector, and the second largest overall, was Traffic.com, Inc. [Nasdaq: TRFC], which raised $78.6 million. Traffic.com was backed by TL Ventures, PA Early Stage Partners, Convergence Capital, and Internet Capital Group. The Technology sector also contained the third largest IPO of the quarter, Liquidity Services, Inc.’s [Nasdaq: LQDT] $76.9 million offering. Liquidity Services was backed by ABS Capital Partners.
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