Global IPO activity
Mirroring the activity seen in London, global IPO activity continued at a pace following COVID-19 restrictions earlier in the year. In Q4 exchanges witnessed 490 IPOs with proceeds of $101bn. This represents a 30% increase in the number of deals and a 9% increase in proceeds compared to Q4 2019, notwithstanding the fact that Q4 2019 figures included the $29bn proceeds from the Aramco IPO.
In the full year, exchanges around the world posted 1,363 IPOs with proceeds totalling US$268bn, both 19% and 29% higher, respectively, than 2019. NASDAQ was in front in terms of proceeds for the full year with $55.3bn being raised, mainly driven by the volume of significant US technology IPOs. In terms of overall deal volumes, the Shanghai exchanges were in the lead hosting 223 IPOs.
In terms of sectors, in a year dominated by COVID-19 pandemic, technology IPOs led the way with 324 deals raising $89b. Industrials followed with 243 deals and $31bn proceeds and healthcare, in third place, with 235 deals and $50bn proceeds.
Private equity (PE) and venture capital (VC) backed IPOs continued to account for 14% of global IPOs by number and 33% by proceeds. In the US, the percentage PE-backed and VC-backed IPOs was significantly higher, representing 52% in volume and 78% in proceeds.
Despite the impact of the new year lockdown on the economy, we expect the levels of listing activity seen in Q4 2020 to continue into 2021. Confidence continues to build with the Brexit deal now giving clarity around the future relationship of the UK with Europe and the accelerating roll out of COVID-19 vaccinations.
As we go to press, we have already seen a number of potential issuers file their registration documents indicating their intention to list in Q1 2021.
Given the level of total funds raised in 2020 attributed to technology IPOs, we are likely to see growth in activity in the FinTech, Tech and BioTech sectors across the coming year whereas more traditional sectors may well take a back seat this year given the COVID-19 impact on business models.
An uptick in IPO activity may also intensify the competition that issuers face for investment, placing greater emphasis on getting ready early for IPO and raising profile with investors so that they are well placed to take advantage of IPO windows as they open.
As we look ahead, global IPO pipelines remain healthy. We expect IPO activity across all major geographies to sustain the momentum going into the first half of 2021 as companies take advantage of high liquidity and positive news flow regarding vaccine implementation programs.
There is also uncertainty around whether the COVID-19 vaccines and other measures will control further spread of the pandemic, which is critical for the global economic recovery. As a result, we may see a burst of activity as issuers transact whilst IPO window remains open.
In terms of sectors, we expect that technology and healthcare IPOs, which excelled during the pandemic, will likely do well in 2021, as some temporary consumer and workforce shifts become permanent and governments continue to allocate budgetary resources to pandemic-related healthcare activities. We also expect to see an increased focus on the renewables sector.