Fourteen venture-backed companies went public in the first quarter of 2011, raising $1.4 billion in the process, according to the National Venture Capital Association. That’s the highest number to go public in a quarter since 2007. While only seven of these companies were in the Internet and technology fields (the rest were in medical and biotechnology), the more interesting data was on mergers and acquisition amounts, which were awesome for Internet-related businesses and pretty grim for hardware and semiconductors (see chart below). In other words, it’s still all about the software.
The NVCA reports that during the first quarter there were 74 M&A deals with a disclosed total dollar value of $3.3 billion. Computer software and services and Internet-specific companies accounted for the bulk of the targets, with 63 deals and the lion’s share of the disclosed value, leaving a measly three semiconductor deals and four hardware deals.
The report also offers good news for the companies that have gone public, as well as for the 49 companies that have filed to go public soon: Of the 14 IPOs in the first quarter, 11 are trading at or above their offering prices as of March 31, 2011. That’s a good sign for Pandora, LinkedIn, Kayak, Boingo and Fusion-IO, which have all filed to go public, as it means they may actually make it out. Having a healthy IPO market also helps boost the M&A value of late-stage companies, which means we could see some companies snatched out of the filing process by larger vendors. Regardless, more IPOs and offerings that retain their value aren’t a joke, but they are something to smile about.