2015 Tech IPOs Underwhelm to the Tune of 30% From Their First Day Close
tl;dr 2015 tech IPOs aren't performing well. Their decline could limit 2016 IPOs, and dampen valuations for growing private tech companies. — The 2015 technology IPO market was lackluster. Tweets: @om Tweets: Om Malik / @om : So this is what @alex is doing at @mattermark Interesting source of future editorial goodness. http://mattermark.com/...
Context & Ripple Effects
The 2015 window was already the thinnest since the financial crisis — only seven VC-backed tech companies had gone public by mid-year the slowest VC-backed tech IPO pace since 2009, and by December just 28 US tech listings existed with half trading below their offer price half of 2015's 28 tech IPOs below their IPO price. Mattermark's data sharpens that picture: the class is down roughly 30% not from its IPO price but from its first-day close, meaning even buyers who paid the opening pop are underwater.
First-order effects
- IPO-bound unicorns lose their pricing template: as Fortune reported the same week, floundering 2015 debuts raise questions about the IPO process itself and complicate exit math for late-stage private companies floundering tech stocks causing problems for IPO-bound unicorns.
Second-order effects
- With public comps repricing downward, startups face pressure to stay private longer at higher paper valuations rather than mark down to market — the dynamic the mid-2015 coverage flagged when delayed IPOs and inflated private rounds were already distorting both sides of the market delayed IPOs and higher private valuations.
Third-order effects
- If the pattern holds, the private valuation–liquidity gap widens structurally: late-stage investors demand downside protection and IPO windows stay gated on a handful of successful debuts resetting comparables — a cycle that persisted until volume finally recovered, as it did by mid-2018 when 28 deals raised roughly $12.2B US tech IPO volume nearly doubling in H1 2018.
The trend: Tech's exit pipeline is cycling through a valuation reset in which weak debut classes suppress new listings and push capital to stay private until public comparables recover.