The IPO market has been pretty dormant this year, mostly because of a lack of tech companies willing to go public in a down market. There are signs that things are starting to get better, though, as a few smaller companies have decided to test out the waters, and at least one big compant already making plans for next year.
The latest to go public is iRhythm Technologies, a provider of diagnostic monitoring solutions that facilitate the early diagnosis and treatment of cardiac arrhythmia. The company had its debut on Thursday, raising $107 million, offering 6.3 million shares at $17, above the $13 to $15 range.
The company had originally planned to raise $75 million by offering 5.4 million shares.
That follows the IPOs of two other tech companies in the last month, both of which did well on the public market.
First there was enterprise cloud company Nutanix, which went public at the end of September, raising $238 million by selling $14.87 million shares at $16. In its first day of trading, it closed at $37 a share. That was followed by spend management software company Coupa, which had its IPO in early October, offering 7.4 million shares at $18 each, raising $133 million. In its first day of trading, the company saw its stock price double to $33 a share.
This comes after a quarter where tech IPOs in the U.S. doubled quarter-to-quarter, according to the 3Q16 Global IPO Review from Renaissance Capital. There were 10 such IPOs in Q3, up from five in Q2. There were only four tech IPOs in the third quarter of 2015.
The amount raised rose 92 percent quarter-to-quarter, from $1.3 billion to $2.5 billion. Year-to-year, it was up 38 percent.
Among those IPOs that lifted the market during the quarter was Japanese messaging app Line. The company, which filed to raise $1 billion.
It offered 22 million shares on the New York Stock Exchange, and closed at $41.58 a share, valuing it at $9 billion, for the largest tech IPO of 2016 so far.
So things are slowly but surely getting better. The real test will be when one of the big companies decides to take the plunge.
I'm speaking specifically of Snapchat, which is looking to go public early next year at a possible $25 billion valuation, it was recently reported. If it does, it will be the largest tech IPO since Alibaba went public in 2014 for $168 billion.
More importantly, if Snapchat does go public, it could spur other unicorns, such as Airbnb and Uber, to finally take the same step, shaking the cobwebs off the IPO market for good.
(Image source: investmenteurope.net)