The initial public offering (IPO) market performance in 2020 defied all expectations, demonstrating the resilience of equity and capital markets. The year saw a total of 1,363 IPOs receiving $268.0 billion.
According to the research data analyzed and published by Comprar Acciones, compared to 2019, the IPO volume in 2020 was up by 19% while the value increased by 29%. The total proceeds from IPOs were the highest on record since 2010 when 1,361 IPOs raised $290.2 billion.
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Technology, industrials and healthcare were the most active sectors in 2020. Cumulatively, they accounted for a 59% share of deals globally and 64% of the total proceeds.
The United States had the highest increase, with the number of deals shooting up by 30% year-over-year (YoY) and the value of IPOs by 78% YoY. In 2019, the region had 217 deals raising $54.9 billion, which increased to 282 deals with a total of $97.9 billion in proceeds.
On the other hand, Asia Pacific was the global leader in the number of deals as well as value. It had a total of 822 deals during the year, raising $136.2 billion. Comparatively, it had 686 deals in 2019, which raised $93.6 billion, marking a 20% and 45% increase respectively.
In Europe, the Middle East, India and Africa (EMEIA), there was a cumulative increase of 7% in deal numbers, from 243 to 259. However, proceeds declined by 43%, going from $59.8 billion to $33.9 billion.
Notably, EMEIA had the largest ever IPO in 2019, when Saudi Aramco was listed on the Tadawul Exchange, raising $29.4 billion. With the exception of this listing, the IPO proceeds in 2020 would have been 12% higher than in 2019.
490 IPOs Raised $101 Billion in Q4 2020, Deal Number Up by 30% YoY
The fourth quarter of 2020 was particularly momentous, bringing the year to an end on the back of remarkable IPO market performance. During the period, a total of 490 IPOs raised a collective $101.4 billion.
In comparison to Q4 2019, the deal number was 30% higher and the deal value, 9% higher. Total proceeds for the period were the highest on record since Q4 2010 when 480 IPOs raised $130.3 billion.
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October 2020 started the quarter off on a high note as it saw 187 IPOs raise $37.4 billion. It was the most active October since 2000 in terms of deal numbers.
November 2020 was comparatively slow, raising $22.0 billion from 94 IPOs. Activity picked up once again in December 2020 as 209 IPOs raised a cumulative $42.0 billion.
The highest valued IPO in Q4 2020 was JD Health, which raised $4.0 billion. Other noteworthy mentions include AirBnB’s $3.8 billion, DoorDash’s $3.4 billion, Allegro.eu SA’s $2.7 billion and Lufax Holding’s $2.7 billion.
Interestingly, all of the above are tech-related companies. Not surprisingly, technology came out as the most dominant sector accounting for 23% of deal volume and 35% of deal value. Healthcare was second with a 16% share of deal numbers and 17% of total proceeds during the quarter.
US Exchanges Accounted for 88% of 2020 IPO Deal Value
Exchanges in the US accounted for most of the IPOs that took place in 2020. They had a 79% share of global deal numbers and an 88% share of total deal value according to EY.
US Nasdaq received a collective $55.3 billion during the year from 181 IPOs, while the NYSE received $30.9 billion from 43 IPOs.
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In the US market, the consumer sector saw the highest number of companies going public in 2020 than during any of the previous five years. A total of 43 consumer companies completed IPOs on top US exchanges during the year according to SP Global. Comparatively, the number was 27 in 2019, 28 in 2018, 19 in 2017, 11 in 2016 and 25 in 2015. In total, the 43 companies raised $19.57 billion, close to three times, the $6.77 billion raised in 2019.
From the total amount, internet-based and direct marketing companies such as DoorDash and AirBnB raised a cumulative $6.11 billion. Hotels, resorts and cruise lines followed at a distance, raising $3.83 billion. Automobile manufacturers were third with $2.81 billion.
Other than AirBnB and DoorDash, large IPOs completed in the US consumer sector in 2020 include Snowflakes’ $3.9 billion, XPeng Inc’s $1.72 billion and Reynolds Consumer Products’ $1.41 billion. Ozon Holdings rounded up the top five, with $1.14 billion.
Looking ahead, the SEC’s approval of direct listings as an alternative to traditional IPOs is bound to drive activity in the US IPO market. Moreover, the over 200 SPACs that listed in 2020 will be searching for deals in 2021 further boosting performance.
Similarly, the global IPO market is expected to remain healthy and sustain the momentum in H1 2021.
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Nica San Juan
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