With custom software to do the dirty work, predictive analytics company CB Insights recently issued its fourth annual list of tech businesses in the “IPO pipeline.” CM Insights’ proprietary software, Mosaic, built with a grant from the National Science Foundation, assesses and scores the “health and momentum” of private tech companies by using “non-traditional public signals ranging from customer signings to hiring activity to media sentiment to web traffic and mobile app data.”
CEO Anand Sanwal calls the 531 companies on the recently released 2016 list the “future S&P 500.” While a handful are already household names–Airbnb, BuzzFeed, The Honest Company, Houzz, Pinterest, Sonos, Snapchat, Uber, Warby Parker, and ZocDoc–none of those are among the top prospectsfor initial public offerings identified by Mosaic.
Sanwal writes in his report’s introduction that the majority of the 531 are “focused on less sexy areas” such as analytics, datacenters, security, and application integration. The 5 in the best position to go public? Actifio (data backup), MuleSoft (app, data, and device integration), Nutanix (server and storage integration), Okta (secure identify management), and Zuora (subscription billing platform), according to the Mosaic analysis.
Sanwal predicts an uptick in private market activity this year, but concedes that it couldn’t get worse than 2015. Last year, CB Insights included 588 companies in the tech IPO pipeline, but only 38 of them went public or exited via merger or acquisition, while 190 raised additional financing. Sanwal also says that this year’s pipeline, for the first time, includes companies that could be forced by the private markets to go public because they are underperforming their valuations.
Here are the most interesting numbers from CB’s 2016 pipeline report:
- 531: Number of tech companies in the CB Insights 2016 IPO pipeline
- 163: Number of those that raised their first round of funding in 2012 or later
- 291: Number based in California
- 64: Number based in New York
- 44: Number based in Massachusetts
- 21: Number in pipeline that are in the electronics sector
- 77: Number in the mobile and telecommunications sector
- 340: Number in the Internet sector
- $89.03 billion: Aggregate amount of equity financing raised by companies in pipelines since 2000
- $36.1 billion: Total equity financing raised by pipeline companies in 2015
- $111 million: Average amount raised by individual IPO pipeline companies in 2014
- $182 million: Average amount raised in 2015
- 48: Number of $100 million-plus equity financing rounds to tech IPO pipeline companies in 2014
- 92: Number of $100 million-plus rounds in 2015
- 16: Number of venture capital backed tech companies newly valued at over $1 billion between 2011 and 2013
- 62: Number newly valued at over $1 billion between 2014 and 2015
- 80: Total number of companies in the 2016 pipeline currently valued at over $1 billion
- 21: Number of $1 billion+ valued companies in the portfolio of SV Angel
The full 2016 tech IPO forecast report is available at the CB Insights website.