CONTACTS Ben Veghte NVCA 1.703.778.9292 bveghte@nvca.org Lauren Herman Thomson Reuters 1.646.223.5985 lauren.herman@thomsonreuters.com VENTURE-BACKED IPO EXIT ACTIVITY MAINTAINS MOMENTUM WITH BEST QUARTER FOR NEW LISTINGS SINCE 2000; LED BY LIFE SCIENCES COMPANIES, FOURTH CONSECUTIVE QUARTER FOR 20+ OFFERINGS Average Deal Size at Highest Level Since 2004 NEW YORK, Thirty-six venture-backed initial public offerings (IPOs) raised $3.3 billion during the first quarter of 2014, a 50 percent increase, by number of new listings, compared to the previous quarter, according to the Exit Poll report by Thomson Reuters and the National Venture Capital Association (NVCA). This quarter, which marks the fourth consecutive quarter to see 20 or more venture-backed IPOs, is the strongest three-month period for new listings since the third quarter of 2000. For the first quarter of 2014, 105 venture-backed deals were reported, 29 of which had an aggregate deal value of $7.5 billion. This represents a 12 percent increase in disclosed value from the fourth quarter of last year and marks the strongest quarter for disclosed value since the third quarter of 2012. Average deal size during the first quarter totaled $259.2 million, the highest average deal size since the first quarter of 2004. Building on the momentum of 2013, the venture-backed exit market is continuing to flourish in 2014, said Bobby Franklin, President and CEO of NVCA. We are encouraged to see life sciences companies experience a period of revival in the public markets. Led by the biotechnology sector, 24 of the 36 IPOs this quarter were life sciences companies, representing over half of the total amount raised. This marks the fourth consecutive quarter for double-digit listings of life sciences companies since the fourth quarter of 2000 and the start of what we hope is a sustained level of growth in the sector.
Page 2 of 5 Quarter/Year Total Deals Deals with Disclosed Values *Total Disclosed Value *Average Deal Size **Number of IPO's Total Offer Amount Average IPO Offer Amount 2009 360 109 12,364.9 113.4 13 1,979.8 152.3 2010-1 149 36 4,945.1 137.4 8 921.9 115.2 2010-2 109 30 2,681.4 89.4 18 1,548.4 86.0 2010-3 141 36 4,140.9 115.0 18 2,061.5 114.5 2010-4 145 48 5,939.8 123.7 26 3,242.6 124.7 2010 544 150 17,707.3 118.0 70 7,774.4 111.1 2011-1 139 51 5,966.8 117.0 14 1,526.9 109.1 2011-2 95 37 6,202.3 167.6 21 5,883.5 280.2 2011-3 142 43 6,934.5 161.3 5 475.9 95.2 2011-4 123 38 4,989.6 131.3 11 2,803.2 254.8 2011 499 169 24,093.2 142.6 51 10,689.5 209.6 2012-1 114 28 3,671.0 131.1 19 1,682.8 88.6 2012-2 123 34 6,304.4 185.4 12 17,227.9 1,435.7 2012-3 125 38 8,687.6 228.6 10 1,140.7 114.1 2012-4 127 32 4,031.1 126.0 8 1,408.4 176.1 2012 489 132 22,694.2 171.9 49 21,459.9 438.0 2013-1 86 11 1,019.3 92.7 8 716.9 89.6 2013-2 96 20 4,371.3 218.6 22 2,249.9 102.3 2013-3 116 30 4,856.7 161.9 27 2,781.4 103.0 2013-4 92 35 6,697.2 191.3 24 5,320.1 221.7 2013 390 96 16,944.5 176.5 81 11,068.2 136.6 2014-1 105 29 7,517.7 259.2 36 3,271.6 90.9 2014 105 29 7,517.7 259.2 36 3,271.6 90.9 *Only accounts for deals with disclosed values **Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile. IPO Activity Overview There were 36 venture-backed IPOs valued at $3.3 billion in the first quarter of 2014. By number of deals, quarterly volume increased 50 percent from the fourth quarter of last year but registered a 38 percent increase, by dollars, compared to the previous quarter. Excluding the top two venture-backed IPOs of all time, Facebook ($16.0 billion) and Twitter ($2.1 billion), the first quarter of 2014 marks the strongest quarter for dollars raised by venture-backed companies since the second quarter of 2011. Led by the biotechnology sector, 24 of the 36 offerings during the quarter were life sciences IPOs, representing over half of total proceeds raised in the first quarter. This
Page 3 of 5 marks the fourth consecutive quarter for double-digit listings in the life sciences sector since the fourth quarter of 2000. By location, 35 of the quarter s 36 IPOs were from U.S.-based companies. Aquinox Pharmaceuticals (AQXP), a Vancouver, Canada-based developer of small molecule therapeutics, raised $53.3 million on the NASDAQ stock exchange on March 6 th, the only non-u.s. offering of the quarter. In the largest IPO of the quarter, Castlight Health (CSLT), a San Francisco, Californiabased healthcare software company, raised $204.2 million and began trading on the New York Stock Exchange on March 13 th. The company is currently trading 39 percent above its $16 offering price. Industry *Number of Venture-Backed IPO's in the U.S. Q1 2014 Total Venture- Backed Offering Size Internet Specific 5 597.2 Computer Software and Services 5 674.8 Information Technology Life Sciences Non-High Technology Computer Hardware 0 0.0 10 1,272.0 Biotechnology 19 1,513.8 Medical/Health 5 223.3 24 1,737.1 Other Products 0 0.0 Consumer Related 0 0.0 Communications and Media 2 262.5 2 262.5 TOTAL 36 3,271.6 *Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile Twenty-eight companies listed on the NASDAQ stock exchange during the quarter, while eight companies listed on the New York Stock Exchange. All of this quarter s 19 biotechnology IPOs listed on the NASDAQ stock exchange. Thirty-one of the 36 companies brought to market this quarter are currently trading at or above their offering price. There are 46 venture-backed companies currently filed publicly for IPO with the SEC. This figure does not include confidential registrations filed under the JOBS Act, where many observers believe the majority of venture-backed companies now file.
Page 4 of 5 Mergers and Acquisitions Overview As of March 31 st, 105 venture-backed deals were reported for the first quarter of 2014, 29 of which had an aggregate deal value of $7.5 billion, the strongest quarter by disclosed deal value since the third quarter of 2012. The average disclosed deal value was $259.2 million, a 35 percent increase compared to the fourth quarter of 2013. The information technology sector led the venture-backed landscape with 79 of the 105 deals of the quarter and had a disclosed total dollar value of $3.3 billion. Within this sector, Computer Software and Services and Internet Specific deals accounted for the bulk of the targets with 37 and 32 transactions, respectively, across these sector subsets. Q1 2014 Information Technology Life Sciences Non-High Technology Industry Number of Venture- Backed deals Number of Venture- Backed deals with a disclosed value Total Disclosed Venture- Backed Deal Value Computer Software and Services 37 5 2,524.0 Internet Specific 32 10 678.1 Semiconductors/Other Elect. 5 1 1.0 Communications and Media 3 2 59.7 Computer Hardware 2 1 3.5 79 19 3,266.3 Biotechnology 7 4 632.7 Medical/Health 6 2 200.0 13 6 832.7 Other Products 7 2 178.5 Consumer Related 4 1 3,200.0 Industrial/Energy 2 1 40.1 13 4 3,418.6 TOTAL 105 29 7,517.7 The largest venture-backed transaction closed during the first quarter was Google s $3.2 billion purchase of Nest Labs Inc, a Palo Alto, California-based provider of home hardware products. VMWare s $1.5 billion acquisition of Atlanta, Georgia-based Air Watch LLC ranked as the second largest venture-backed deal during the quarter.
Page 5 of 5 Deals bringing in the top returns, those with disclosed values greater than four times the venture investment, accounted for 41 percent of the total disclosed transactions during the first quarter of 2014. Venture-backed deals returning less than the amount invested also accounted for 41 percent of the quarterly total. Analysis of Transaction Values versus Amount Invested Relationship between transaction value and investment Q1 14 ** Deals where transaction value is less than total venture investment 12 Deals where transaction value is 1-4x total venture investment 5 Deals where transaction value is 4x-10x total venture investment 7 Deals where transaction value is greater than 10x venture investment 5 Total Disclosed Deals 29 ** Disclosed deals that do not have a disclosed total investment amount are not included About Thomson Reuters Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organizationthomson Reuters shares are listed on the Toronto and New York Stock Exchanges. For more information, go to http://thomsonreuters.com. About National Venture Capital Association Venture capitalists are committed to funding America s most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth. As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community s preeminent trade association, NVCA serves as the definitive resource for venture capital data and unites its nearly 400 members through a full range of professional services. For more information about the NVCA, please visit www.nvca.org.