After years without an impressive exit via an IPO, it appears that we should get used to this new reality - sizzling IPOs will be a rare occurrence. Israeli exits via M&A's totaled $5.2 billion in 2011, and Imperva Inc. (NYSE: ) was the only major Wall Street IPO, raising $90 million.
Most exits by venture capital-backed companies were through M&A's. While this is true for the Israeli market, which since 2006 has counted the number of Wall Street IPOs in single digits, and it is equally true in the US.
The annual Dow Jones Ventures report on exits by US venture capital-backed companies, found that while there was an increase in the number of exits via M&A's in 2011, the number of exits via IPOs fell. 522 venture capital-backed companies made exits in the US in 2011, for a total of $53.2 billion - 26% more than in 2010, despite a 14% drop in the number of companies. In other words, more companies were sold for higher amounts than in the past.
The average acquisition price was $71 million in 2011, 77% higher than in 2010. The average amount of capital raised by a company prior to its exit was $17 million - 12% less than in 2010. The average time to exit was five years.
In contrast to acquisitions, high-tech start-ups needed an average of 8.1 years from their founding to an IPO, and raised an average of $85 million. Although the number of IPOs fell - 45 venture capital-backed companies held IPOs in 2011, raising $5.4 billion altogether, well above the aggregate $3.3 billion raised in IPOs in 2010. The difference was due to two huge IPOs: Zynga Inc. (Nasdaq: ZNGA) and Groupon Inc. (Nasdaq: GRPN), which raised $1.7 billion between them.
Published by Globes [online], Israel business news - www.globes-online.com - on January 19, 2012
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