Venture Capital Benefits from Mega IPOs

July 26, 2019 | ,

The first half of 2019 has produced a number of high profile IPOs including Uber, Slack, Pinterest, Zoom, Beyond Meat, and Lyft. These IPOs have made it a very successful year for U.S. venture capital exits. While the absolute number of exits has remained slightly below the pace of recent years, this year’s exits have been larger, generating nearly $190 billion through the first half of 2019. This year’s second-quarter exit value alone has exceeded the annual amounts for the venture industry going back to 2006. IPOs have accounted for nearly 83% of the cumulative exit value so far in 2019.

This strong exit environment is likely to allow U.S. venture capital to repeat 2018 as the strongest area of performance within the broadly defined private equity market. While we expect the first quarter to provide strong returns, the second quarter is where we will see a significant increase in performance as IPO offerings ramped up in the spring/early summer. With a robust remaining pipeline of potential IPOs scheduled for the second half of 2019 and 2020 including Airbnb, Palantir, Robinhood, Postmates, and WeWork, we do not see this market cooling off much in the near-term. Regardless of which of these remaining high profile IPOs materialize this year, 2019 is likely to be remembered by investors as the year of mega IPOs.

Print PDF > Venture Capital Benefits From Mega IPOs

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Related Content

09.22.2023

2023 Investment Symposium

Watch the flash talks from Marquette’s 2023 Investment Symposium livestream on September 15 in the player below — use the upper-right…

09.21.2023

The State of the IPO Market

After a red hot 2021, the initial public offering (IPO) market has materially slowed over the last two years amid…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Combination 3-line and area chart showing interest payments as a percentage of household income and new delinquency rates for various forms of U.S. consumer debt. Chart subtitle: Interest payments as a percentage of household income have increased to a 15-year high while delinquencies have risen to pre-pandemic levels. Chart source: Bureau of Economic Analysis, Federal Reserve Bank of New York Center for Microeconomic Data as of June 30, 2023. Chart visual description: Data is quarterly; displayed in 9-month increments on x-axis from Mar-03 to Jun-23. Left Y-axis is labeled “Percentage of Household Income” and ranges from 0% to 5%. Right Y-axis is labeled “New 30+ Day Delinquency” and ranges from 0% to 16%. Interest Payments (Excl. Mortgages) corresponds to left Y-axis and is plotted in solid dark gray area. Lines plot three other data series corresponding to right Y-axis: teal for Auto Loans, light teal for Credit Cards, and dark teal for Student Loans. Chart data description: Interest Payments have increased sharply since September 2021 following rate hikes by the Federal Reserve. Auto Loans and Credit Cards lines have generally followed same slope since. Student Loans sharply decreased following payment pauses, and have remained near flat. Latest data points as of June 2023: Interest Payments at 4%. Auto Loans at 7%. Credit Cards at 7%. Student Loans at 1%. Please contact us for the full dataset. End chart description. See disclosures at end of document.

09.12.2023

Feeling the Squeeze

As investors and economists meticulously analyze data to predict future actions of the Federal Reserve, the domestic economy has maintained…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Combination line and area chart showing cumulative return of the S&P 500 Semiconductors & Equipment Index and value of private construction put in place by sector. Chart subtitle: The CHIPS and Science Act has helped provide a tailwind for semiconductor companies over the last year. Chart source: Bloomberg and U.S. Census Bureau as of July 31, 2023. Chart visual description: Data is monthly; displayed in 6-month increments on x-axis from Aug-13 to present. Left Y-axis is labeled “Value of Private Construction Put in Place” and ranges from $0B to $210B (labeled through $200B). Right Y-axis is labeled “Cumulative Return” and ranges from 0% to 1000%. Sectors corresponding to left axis are as follows: Computer/Electronic/Electrical uppermost of area stack in green; Chemical in blue; Food/Beverage/Tobacco in purple; Transportation Equipment in teal; Plastic/Rubber in dark blue; Nonmetallic Mineral in orange; Fabricated Metal in dark green; Other in gray. Line corresponding to S&P 500 Semiconductors & Equipment Index is slate, corresponding to right Y-axis. Chart data description: Please contact us for the full dataset. Latest data as of July 2023: S&P 500 Semiconductors & Equipment Index at 907% cumulative return; CEE at $110.9B; Chemical at $37.8B; Food/Bev/Tobacco at $15.9B; Transp Equipment at $9.1B; Plastic/Rubber at $2.2B; Nonmetallic Mineral at $1.9B; Fabricated Metal at 1$.4B; Other at $21.5B. End chart description. See disclosures at end of document.

09.06.2023

CHIPS Ahoy!

The U.S. Department of Commerce recently celebrated the one-year anniversary of the CHIPS and Science Act, which was signed into…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Two-line chart showing prices for live cattle futures and corn futures. Chart subtitle: Higher beef prices could lead to more expensive cookouts this Labor Day weekend. Chart source: Bloomberg as of August 29, 2023. Chart visual description: Data is monthly. Left Y-axis is labeled “$/Pound” corresponding to Live Cattle Futures slate line and ranges from $0 to $2. X-axis ranges from June 1992 to August 2023. Right Y-axis is labeled “$/Bushel” corresponding to Corn Futures light green line and ranges from $0 to $9. Chart data description: Please contact us for the full dataset. Latest data as of August 29: Live cattle $1.81/lb; Corn $4.69/lb. End chart description. See disclosures at end of document.

08.30.2023

Where’s the (Affordable) Beef?

Readers who have recently shopped for Labor Day barbeque supplies may lament the fact that beef prices have climbed to…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Two-line chart showing Brazil CPI and Brazil Key Rate. Chart subtitle: Brazilian officials lowered the country’s key rate earlier this month in response to falling inflation. Chart source: Bloomberg as of August 2, 2023. Chart visual description: Data is monthly. Y-axis ranges 0-16%. X-axis ranges from January 2012 through April 2023 in 5-month increments; data is complete through July 31, 2023. Brazil CPI (YOY) is plotted in light blue line and Brazil Key Rate is plotted in dark blue line. Please contact us for the full dataset. End chart description. See disclosures at end of document.

08.23.2023

Brazil Eases Into the Fall

On August 2, Brazil’s central bank cut its benchmark interest rate by 50 basis points, from 13.75% to 13.25%. This…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >