SAN FRANCISCO—Twenty-four U.S. companies have executed initial public offerings (IPOs) so far in 2011, an increase of 85 percent from the same time period in 2010, according to financial research and services provider Renaissance Capital LLC.
The 24 U.S.-based IPOs this year is the most of any region in the world so far this year, Renaissance Capital said. In 2010, the Asia-Pacific region had the most IPOs, according to the firm.
The 24 IPOs from U.S. companies this year raised $8.1 billion, more than four times the $1.9 billion raised by the 13 U.S. IPOs through this time period of 2010, according to Renaissance Capital. After strong IPO issuance in November and December, the IPO market seems to be sustaining the momentum seen at the end of 2010, the firm said, a sign that the IPO market is back to normal levels of issuance expected in a growing economy.
According to Renaissance Capital, the return of the U.S. to the top of the IPO heap is due to a number of factors, especially the increasing quality and growth potential of U.S. IPOs relative to Asia-Pacific offerings and the broad underperformance of Asia’s equity markets.
U.S. IPO momentum is also building with a pipeline of high-profile deals, according to Renaissance Capital.
So far in 2011, there have been only nine IPOs outside the US with a deal size above $100 million, down more than 50 percent from 19 in the comparable period last year, Renaissance Capital said. The US share of IPO proceeds stands at nearly 70 percent year-to-date, a significant jump from the 19 percent share for all of 2010, the firm said.
The number of Chinese IPOs is down relative to last year due to deteriorating issuer quality and China growth concerns, Renaissance Capital said.
Renaissance Capital said the most notable industry sector for U.S. IPOs so far this year has been technology and communications, with companies such as Demand Media, NeoPhotonics, Epocrates, Velti and InterXion all garnerign strong receptions. Interest in these companies has generally been driven by strong recent and forecasted growth, and in all five cases, investors have been willing to overlook some fundamental concerns and focus on top-line growth, Renaissance Capital said.
There are currently 34 private equity-backed deals currently in the IPO pipeline, including big names like Freescale Semiconductor Inc., Renaissance Capital said. The large number of telecom, tech and social networking companies in the pipeline may signal that the U.S. economy is finally about to grow with new companies raising capital for job creation, the firm said. Well known firms such as Skype, LinkedIn and Pandora have already filed for IPOs this year and Groupon, Zynga, Facebook, and HomeAway are reportedly gearing up for IPOs, Renaissance Capital said.
There are dozens of other venture-backed U.S. companies in the software, digital media and mobile sectors in the shadow pipeline, Renaissance Capital said.