After the success of the CB Insights’ 2013 Tech IPO Pipeline Predictions (results here), we wanted to take a fresh look into into the fastest-growing, most highly valued private companies in technology. The 2014 Tech IPO Pipeline has 590 investor-backed private technology companies in the United States today with valuations, real or rumored, of greater than $100 million and who are demonstrating significant momentum based on our proprietary private company Mosaic ratings.
Like last year's list, the 2014 Tech IPO Pipeline currently represents the cream of the crop within investor portfolios, and those companies that may be on their way to an IPO given sustained product, market and financing momentum. Of course, it should be explicitly mentioned that not all of these 590 companies will make it to an IPO next year or ever. Many have just crossed the $100M valuation threshold and, with the time to IPO increasing significantly, have their work cut out for them before they can even ponder the option of going public. Others among this group will never actually breakthrough to the level needed to be deemed public market worthy, or will be acquired along the way. And some will fall short, get out-executed, and may never see a liquidity event.
But as of this moment, these are the companies in tech you should know.
Below is a high-level summary of some of the report’s highlights. For all of the findings, download the entire report. It’s free.
It Must Be the Money
With corporate investors and financial services firms (including hedge funds) becoming more active and writing larger checks to tech companies, capital has become seemingly plentiful for pipeline companies. To date, the 590 companies in the pipeline have raised a whopping $55.35B across more than 2,800 financing deals. Of note, the average amount raised by companies on the Tech IPO Pipeline has climbed significantly from last year and now stands at $101M. The median amount raised stands at $73M, a slight drop from last year’s $76M median.
The Billion Dollar Valuation Club Grows – Bubblicious?
With massive financing and secondary market rounds becoming more frequent, so have billion dollar plus valuations. The number of Tech IPO Pipeline companies that raised financing with a rumored valuation of $1B+ in 2013 jumped 67% versus 2012.
While tech companies in the pipeline cover a wide spectrum of valuations with some just entering nine figure valuation territory, there are 26 companies on the list that have raised a financing round at a real or rumored valuation of $1B or more. The full list of companies is below.
Space Exploration Technologies
Is Kleiner Perkins Getting its Mojo Back?
The top 10 investors based on quantity of tech IPO pipeline companies they have invested in includes many of the storied firms of venture capital and is led by Kleiner Perkins Caufield & Byers and New Enterprise Associates. After some exits in 2013, Intel Capital and Sequoia Capital fall slightly to the number 4 and 5 positions. Of note, there are a total of 599 investors (VCs, angels, corporations) with at least two companies in the 2014 Tech IPO Pipeline.
The graphs below show when the top four investors first invested in the companies that figure into the Tech IPO pipeline. As shown below, Accel most frequently first invested at the Series A stage, while Intel Capital and KPCB most often invested at the mid-stages (Series B/Series C).
Based on stage of entry into companies, First Round Capital ranks highest for getting in early into the future tech high elite – what we refer to as Selection Aptitude
NY Sees 50% Jump in Pipeline Companies
California is home to over half of the Tech IPO Pipleine, and has seen the number of pipeline companies jump from 222 in 2013 to 308 for 2014. As a testament to its growth as a tech venture hub, New York saw its number of total pipeline companies jump nearly 50% from last year’s list (41).
Ad Tech and eCommerce IPOs Coming in 2014?
Internet companies make up over half of the 2014 Tech IPO Pipeline, followed by mobile & telecom companies. And both have seen significant growth in their share of the pipeline. There are currently 320 Internet companies on the Tech IPO Pipeline, an increase of 39% from last year’s list.
2013 saw several notable Ad Tech and eCommerce IPOs including Rocket Fuel, YuMe and Zulily. And within the Internet sector, Ad Tech and eCommerce see the highest number of companies currently on the pipeline, followed by the Business Intelligence & Analytics industry. The overall picture within the Internet sector shows a great deal of diversity at the industry level.
Sign up to receive the entire 2014 Tech IPO Pipeline report for free by entering your business email address in the form below.
Last Year’s Tech IPO Pipeline Results
Last year, we identified 472 tech companies that represented the cream of the crop within VC and private equity portfolios, and here is how we did:
472 Tech IPO Pipeline companies identified in December 2012
48% have exited or raised additional financing since the list was issued
57 have exited in for an aggregate value of $44 billion
171 of the companies have raised additional financing totaling $5 billion
Last year's, Tech IPO Pipeline companies were identified using the CB Insights venture capital database and were synthesized by looking at technology companies in the United States with valuations, real or rumored, of greater than $100 million or who were demonstrating significant momentum based on our private company Mosaic ratings.
At the time, these 472 companies represented the cream of the crop within VC and private equity portfolios. Now just a year later, 57 of the firms on the 2013 Tech IPO Pipeline have exited via IPO or M&A for an aggregate disclosed exit valuation of $44.4 billion.
Of the 57 exits since the report was issued, 36 companies exited via M&A and 21 went public including FireEye and Zulily. In our earlier research, we found that tech companies that have gone public since 2007 took an average of 7 years from first funding to IPO exit. And this year’s successfully predicted tech IPOs were no exception. The 21 companies took an average of 7.4 years and a median of 6.8 years to IPO. In terms of venture capital financing, the 21 successfully predicted tech IPOs from the 2013 pipeline raised an average of $194 million and a median of $106 million in pre-IPO funding, more than double historical pre-IPO exit funding averages.
While capital efficiency is the mantra of tech investors, positioning a company to go public requires significant capital. And so, it’s not surprising that another 171 companies on last year's list have gone on to raise additional financing. In the last year, these 171 firms have raked in an additional $5 billion in financing. Among the IPO Pipeline candidates to raise additional funding rounds this year are Ping Identity, Pure Storage and SugarCRM.
The 2014 Tech IPO Pipeline will highlight over 500 over the most promising private tech companies and will analyze the industries they are targeting, the investors who've backed them, and the geographies they call home among other factors.
To receive the 2014 Tech IPO Report pre-release, sign up by entering your business email address in the form below.
Photo credit: George Rex