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Enterprise Technology IPOs At the Highest Rate In More Than 10 Years

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Enterprise Technology IPOs At the Highest Rate In More Than 10 Years

Software and information security startups dominate B2B IPOs and the pipeline tracked by 451 Research

PR Newswire

NEW YORK, Sept. 5, 2018 /PRNewswire-PRWeb/ -- 451 Research's financial team says 2018's enterprise tech IPO party may be far from over. Thus far, more vendors have gone public than any other year in the recent decade, for the most part successfully. 451 Research counts nearly 40 other B2B tech companies waiting in the wings for an IPO. Application software and security companies, propelled by robust business spending, dominate both launched and would-be IPO lists.

Those companies that have already made their debuts have mostly been successful. Every enterprise startup except one that has gone public this year has priced either in-range or above and then traded higher in the aftermarket. Growth-hungry investors have rewarded the newly public companies with valuations that are 2-4x richer than prevailing trading multiples for the overall tech industry. Standout debuts that have garnered double-digit valuations during the first half of 2018 include Zscaler, Dropbox and Zuora.

The prominence of application software and security vendors in the IPO ranks is undoubtedly related to robust business spending plans in those areas. According to 451 Research's Voice of the Enterprise: Information Security, Budgets and Outlook, 17% of buyers say they will be increasing their spending on information security (infosec) products, with 12% forecasting bigger budgets for enterprise applications. That demand is showing up in the results of the startups that are going public. Broadly, the software and security vendors that have debuted so far in 2018 are increasing sales 30-60% year-over-year.

451 Research expects the unprecedented flow of tech IPOs to continue throughout the remainder of 2018, as long as Wall Street keeps paying up for new names. Of the 39 candidates 451 Research tracks in its 'shadow IPO pipeline,' three-quarters of them – including names such as Anaplan, CrowdStrike and Turbonomic – are in the application and security segments that have so far dominated actual initial public offerings.

This list of candidates is part of a database of more than 3,000 independent private enterprise-sized companies that is an add-on product to 451 Research's M&A KnowledgeBase.

About M&A KnowledgeBase
451 Research's M&A KnowledgeBase is a global database of 55,000+ tech M&A transactions across more than 650 segments of the tech and telecom marketplace. Informed by more than 100 industry analysts, the database offers deep insight on transactions, including proprietary estimates of undisclosed private-company valuations. M&A KnowledgeBase is the only transactions database focused exclusively on the technology industry and the leading source for tech M&A intelligence and valuation guidance. Learn more.

About 451 Research
451 Research is a leading information technology research and advisory company focusing on technology innovation and market disruption. More than 100 analysts and consultants provide essential insight to more than 1,000 client organizations globally through a combination of syndicated research and data, advisory and go-to-market services, and live events. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group. Learn more and connect with 451 Research on Twitter and LinkedIn.

 

SOURCE 451 Research, LLC

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