The four themes that generated the highest IPO returns for investors* were cybersecurity, collaboration tools, big data and cloud technology. By contrast, the themes that generated negative investor returns included batteries, edtech, 3D printing, and blockchain, says GlobalData, a leading data and analytics company.
The company’s latest report, ‘Thematic Research: IPOs in TMT’, reviews the IPOs of 539 tech, media and telecom (TMT) companies that listed in 2018, 2019, or H1 2020. In the first half of 2020, IPO deal count dropped by 25% to 87 compared with the same period last year. Deal value, measured by IPO proceeds, dropped by 24% to $19.5bn, according to GlobalData’s Deals Database.
Swati Verma, Senior Analyst, Thematic Research at GlobalData, commented: “The TMT sectors likely to come out of the pandemic in the best shape are security software, gaming software, cloud services, social media, publishing and ecommerce. GlobalData expects to see IPO activity gravitate towards the themes driving these sectors in the second half of 2020, while the medium-term outlook for IPOs in early-stage technologies such as batteries, edtech, 3D printing and blockchain is negative, according to our research.”
GlobalData’s analysis found that COVID-19 has significantly slowed the TMT IPO market. In the first half of 2020, the volume of IPOs dropped 25% to 87 flotations compared to H1 2019. Deal value, measured by IPO proceeds, dropped by 24% to $19.5bn.
Verma concluded: “GlobalData believes that security software, gaming, cloud services, social media, publishing, and ecommerce will all come out of the pandemic in a stronger position. We expect to see IPO activity gravitate towards these sectors in the second half of 2020. There are some promising IPOs planned for the next six months and we will watch with interest the preparations of companies such as game developer Nazara Technologies, and cloud companies Rackspace Technology and Snowflake.”
* Between 1 January 2018 and 30 June 2020
Information based on GlobalData’s report: ‘IPOs in TMT’