Behind a flurry of healthcare companies (biotech, pharma, drug, medical devices) going public this year, 2013 has turned out to be a robust year for venture-backed IPOs. There were several investors who participated in many of these IPOs including the group of eleven detailed below who participated in five or more IPOs in 2013 YTD. As a testament to the booming healthcare IPO market, seven of the eleven investors on the list are healthcare-focused VCs including MPM Capital, which has quietly racked up a wave of healthcare IPOs this year already.
In addition, 2013 has seen 204 venture firms participate in at least 1 IPO – a significant increase over years past. Corporate VCs also had a great year with IPOs with 27 corporate venture units having invested in at least one IPO company.
One of the things our LP clients look for in VC firms is Selection Aptitude which is a gauge of how investors source and select high quality investments. The stage at which an investor enters a company provides some useful insight into the VC’s dealflow and ability to see around corners.
The chart below breaks down the top IPO investors based on the stage they invested in their respective portfolio IPOs. Interestingly, healthcare-focused investors such as MPM Capital, Flagship Ventures and Domain Associates often got in early in their respective IPOs. Both KPCB and New Enterprise Associates (NEA) invested in earlier than the Series B stage in four of their IPOs in 2013 YTD. Unsurprisingly, DAG Ventures and Meritech Capital Partners primarily got in to their respective 2013 IPOs at the mid or late stage – in line with their investment focus as expansion capital providers.
This year’s healthy IPO market also helped more VC investors participate in an IPO liquidity event than in years past. In fact, the 204 venture capital investors that have notched an IPO exit in 2013 to date is already 40% higher than the total number of VC investors with one or more IPOs in all of 2012.
The increase of IPO activity in 2013 has also carried over to corporate VCs. There are 27 corporate venture capital arms that have participated in an IPO in 2013 to-date, a 107% increase from the number of CVCs with an IPO exit in all of 2010. And the number of CVCs recording three or more IPOs has also jumped. In 2013 YTD, four CVC investors have logged three or more IPO exits versus zero in 2010.