2016 Global Tech Exits€¦ · In 2016, there were 1650+ M&A exits and 25 IPOs in the US. IPO activity increased in the second half of 2016 with 17 US tech IPOs compared to the first

THE 2016 GLOBAL TECH EXITS REPORTA comprehensive, data-driven look at global tech exits, including M&A, IPO trends, and much more

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TABLE OF CONTENTS

# SECTION

6 Summary

7 Global Trends

14 Geographic Recaps

19 VC-Backed Trends

30 League Tables

SUMMARY OF FINDINGS


TOTAL TECH EXITS DROPPED IN 2016, BUT IPOs UP: Globally, there were 3260 M&A exits and 98 IPOs in 2016. Total tech exits saw a 4% decline over 2015, which saw 3421 M&A exits and 90 IPOs. Overall, exit activity was up in the second half of 2016 with 1726 exits compared to 1632 exits in the first half of 2016.

US IPO ACTIVITY UP IN THE SECOND HALF OF 2016: In 2016, there were 1650+ M&A exits and 25 IPOs in the US. IPO activity increased in the second half of 2016 with 17 US tech IPOs compared to the first half of 2016 which saw 8 tech IPOs. Conversely, M&A activity saw a drop in the second half of 2016 with 793 M&A tech deals in the US compared to 862 in the year’s first half.

SV ANGEL LEADS ALL VCs IN TECH EXITS: In 2016, SV Angel led all venture capital firms in the number of exits. SV Angel backed tech companies like Cruise Automation, Twilio, and Vurb. Other VCs in the top 5 include 500 Startups, Andreessen Horowitz, and Norwest Venture Partners.

GOOGLE WAS THE MOST ACTIVE ACQUIRER IN 2016: Google made several tech acquisitions in 2016 including Eyefluence and API.AI, among several others. Salesforce and Accenture tied for the number 2 spot followed by J2 Global, which bought companies including Offers.com and Web24.

UNICORN BIRTHS DECLINE, UNICORN EXITS INCREASE IN 2016: There were 18 $1B+ tech exits in 2016 including The Dollar Shave Club, Cruise Automation, and Jet, among several others. That’s up over 2015 which saw just 12 tech exits of $1B+. However, unicorn births have significantly declined in 2016 with just 25 companies gaining $1B+ valuations, a 68% decline year-over-year compared to 2015.

IPOs OF VC-BACKED COMPANIES TRENDING HIGHER: Among the subset of VC-backed IPOs, H2’16 (22) also saw an increase over H1’16 (13) with startups like Nutanix, Coupa Software, and Quantenna Communications going public. In total, there were 62global technology IPOs in the second half of 2016 compared to 36 IPOs in the first half of 2016.

INTEL CAPITAL MOST ACTIVE CORPORATE AGAIN IN 2016: Intel Capital saw the most tech exits among all corporates and corporate venture investors. The investor saw exits in iControl Networks, Impinj, and Nexmo, among others. The second and third spots were rounded out by GV (Google Ventures) and Salesforce Ventures.

REPORT ONLY INCLUDES FIRST EXITS: This report only includes companies that have exited for the first time. PayPal, for example, is not included, despite a second IPO in July 2015 within the time frame of this report. For questions regarding this methodology, reach out to [email protected].


Global Tech Exits: MACRO TRENDS

GLOBAL TECH EXITS TICK

DOWN IN 2016, BUT IPO ACTIVITY TRENDING UP

There were 3350+ tech

exits in 2016, a 4% decline over 2015. After a slow start to the year, the

second half of 2016 saw more than 60 IPOs including companies like

Nutanix and The Trade Desk going public. This compares to just 36 IPOs

in the beginning of the year.


QUARTERLY GLOBAL TECH EXITS2014 – 2016

645 694 680 731 886 987 818 730 778 818 836 828

25

4319

27

13

36

16

2514

2230 32

2014 2015 2016

M&A IPO

ONLY 4% OF TECH EXITS

ARE UNICORN EXITS

Based on disclosed

valuations, 4% of companies exiting in 2016 did so for $1B+

including e-commerce site Jet.com, razor brand Dollar Shave Club, and

travel tech company Skyscanner.


GLOBAL TECH EXIT VALUATIONS2016

54%

13%

13%

7%

4%

1%

2%

1%

1%

1%

1%

4%

<$50

$50 - $100

$100 - $200

$200 - $300

$300 - $400

$400 - $500

$500 - $600

$600 - $700

$700 - $800

$800 - $900

$900 - $1000

$1000+

Exit Valuation ($M)

MOST EXITED TECH

COMPANIES DON’T RAISE VC, PE, OR GROWTH EQUITY

More than two-thirds of

companies didn’t raise VC, PE, or growth equity financing prior to exit in

2016. This number has decreased over 2015 where 75% of exited tech

companies did not raise VC, private equity, or growth equity.


FUNDING STATUS OF TECH COMPANIES AT TIME OF EXIT2016

32%

68%

Raised Prior Funding

No Funding

US LEADS, WITH UK, INDIA,

CANADA, AND GERMANY ALSO IN THE TOP 5

The United States took

the number one spot with more than 1600 tech exits in 2016.

European markets like the UK, Germany, France, Sweden, and the

Netherlands were among the countries in the top 10.


COUNTRY RANK BY NUMBER OF EXITS2016

RANK COUNTRY RANK COUNTRY RANK COUNTRY

1 United States 15 Singapore 28 Malta

2 United Kingdom 15 Brazil 30 Indonesia

3 India 17 Ireland 30 Nigeria

4 Canada 18 Japan 30 Russian Federation

5 Germany 19 Norway 30 Hong Kong

6 France 20 Switzerland 34 Thailand

7 Australia 20 Finland 34 Taiwan

8 Sweden 22 Belgium 34 Czech Republic

9 Netherlands 23 South Africa 37 Vietnam

10 Israel 23 Poland 38 United Arab Emirates

11 China 25 Romania 38 Philippines

12 Spain 26 Malaysia 38 Portugal

13 Italy 26 New Zealand 38 Estonia

14 Denmark 28 Austria

COUNTRY RANK BY NUMBER OF TECH EXITS2016

MOBILE ACCOUNTED FOR

~20% OF EXITS IN US, INDIA, & CANADA

Every country except

Canada saw internet exits account for 55%+ of exits in 2016. The mobile

sector in India accounted for 27% of exits in 2016, the largest percentage

within mobile across all 5 countries.


SECTOR SHARE OF TECH EXITS BY TOP 5 COUNTRIES2016

55%

55%

61%

49%

60%

17%

13%

27%

19%

14%

11%

11%

5%

12%

9%

11%

15%

5%

13%

10%

5%

5%

1%

6%

7%

1%

1%

1%

1%

United States

United Kingdom

India

Canada

Germany

Internet Mobile & Telecommunications

Software (non-internet/mobile) Computer Hardware & Services

Electronics Consumer Products & Services

MOBILE AND COMPUTER

HARDWARE UP, INTERNET EXITS DOWN IN Q4’16

The mobile and

computer hardware sectors reached 5-quarter highs in exit

share, accounting for 19% and 15% of tech exits, respectively.

Conversely, internet exits fell to 46% — a 5-quarter low.


SHARE OF TECH EXITS BY SECTORQ4’15 – Q4’16

57% 58% 59% 54% 46%

18% 15% 15%

16%

19%

13%8%

11%12%

13%

8%13% 8% 11%

15%

3% 5% 5% 5% 6%

1% 1% 1% 2% 1%

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Internet Mobile & TelecommunicationsSoftware (non-internet/mobile) Computer Hardware & ServicesElectronics Consumer Products & Services


Geographic Recaps: INTERNATIONAL TRENDS

EUROPEAN EXIT ACTIVITY

UP IN SECOND HALF OF 2016

Q3’16 saw 284 M&A exits

and 9 IPOs, a 5-quarter high for European exits.

There were 28 European IPOs in 2016.


QUARTERLY TECH EXIT VOLUME: EUROPEQ4’15 – Q4’16

185 191 217 284 257

64

5

9

10

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

M&A IPO

ASIA SEES IPO NUMBERS

STEADILY INCREASE

Exit activity in Asia

reached 103 exits in Q3’16 but dropped 7% in Q4’16 to 96 exits.

The region saw 12 tech

IPOs in Q4’16, more than in the previous two quarters combined.


QUARTERLY TECH EXIT VOLUME: ASIAQ4’15 – Q4’16

82 84 94 97 84

44

56

12

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

M&A IPO

US IPOS UP, M&A EXIT

ACTIVITY DROPS IN SECOND HALF OF 2016

While US IPOs recovered

in the second half of 2016, M&A exits dropped significantly with Q3’16

M&A activity falling below 400 exits for the first time in the 5-quarter

trend.


QUARTERLY TECH EXIT VOLUME: USAQ4’15 - Q4’16

401 433 429 390 403

12

2 6

11

6

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

M&A IPO

CALIFORNIA LEADS, NY

FOLLOWS IN EXITS

California and New York

led US state-level exit activity in 2016. The third spot was tied by

Massachusetts and Texas which both realized more than 90

tech exits in 2016.


US STATE RANK BY NUMBER OF TECH EXITS2016

RANK STATE RANK STATE RANK STATE

1 California 13 Utah 29 South Carolina

2 New York 16 Tennessee 30 DC

3 Massachusetts 16 Arizona 31 Oklahoma

3 Texas 16 New Jersey 31 Nebraska

5 Illinois 19 Minnesota 33 Vermont

6 Florida 20 Michigan 33 Alabama

7 Pennsylvania 21 Missouri 33 Idaho

8 Virginia 22 Oregon 36 Kentucky

9 Washington 23 Nevada 37 Rhode Island

10 Georgia 24 Connecticut 37 New Mexico

11 Colorado 24 New Hampshire 37 Iowa

12 North Carolina 24 Indiana 37 Delaware

13 Maryland 27 Kansas 41 South Dakota

13 Ohio 27 Wisconsin 41 Mississippi

US STATE RANK BY NUMBER OF TECH EXITS2016


State Of VC-Backed Exits: M&A AND IPO TRENDS

VC-BACKED ACTIVITY

SPIKES IN SEPTEMBER, DROPS THROUGH DECEMBER

September saw 63 VC-

backed M&A deals and 9 tech IPOs, a 12-month high in exit activity.

11 out of 12 months in

2016 saw a VC-backed tech IPO.


MONTHLY GLOBAL VC-BACKED TECH EXIT TRENDS 2016

52 66 53 61 41 61 59 64 63 60 59 52

1

1

2

2

3

44

9 32

4

January February March April May June July August September October November December

M&A IPO

VC-BACKED EXIT

ACTIVITY INCREASES IN 2016

In 2016, there were 726

(691 M&A, 35 IPOs) venture-backed exits, a 9% increase over 2015

exit activity.

Venture-backed IPO activity improved in the second half of 2016 with

22 IPOs, compared to 13 in the first half of the year.


QUARTERLY VC-BACKED TECH EXIT TRENDS Q1’14 – Q4’16

151 150 170 142 171 168 143 150 171 163 186 171

14 258

17

514

4 13

49

13

9

2014 2015 2016

M&A IPO

44% OF TECH STARTUPS

EXIT IN THE EARLY-STAGE

In 2016, 25% of venture-

backed exits were seed-stage startups, and 19% were Series A-stage

startups.

23% of venture-backed exits were of mid-stage (Series B and Series C)

startups.


LAST ROUND RAISED BEFORE EXIT BY VC-BACKED TECH

COMPANIES2016

25%

19%

15%

8%

5%

4%

4%

3%1%

2%

13%Seed / Angel

Series A

Series B

Series C

Series D

Series E+

Debt

Growth Equity

Private Equity

Convertible Note

Other

LESS THAN 10% OF

COMPANIES RAISED $100M+ BEFORE EXIT

There were 50

companies that raised $100M or more before exiting in 2016 including

breakout companies such as Twilio, Lytx, and Ping Identity.


AMOUNT RAISED BY VC-BACKED TECH COMPANIES BEFORE

EXIT2016

58%

14%

6%

5%

4%

2%

2%

1%

1%

1%

7%

<$10

$10 - $20

$20 - $30

$30 - $40

$40 - $50

$50 -$60

$60 - $70

$70 - $80

$80 - $90

$90 - $100

$100+

Total Amount Raised ($M)

INTERNET AND MOBILE

DOMINATE, ELECTRONICS ON THE RISE

In Q4’16, the internet

sector accounted for 54% of tech exits while mobile accounted for

22% of tech exits.

Electronics exits ended the period with 5% of the total in Q4’16.


SHARE OF VC-BACKED TECH EXITS BY SECTORQ4’15 – Q4’16

56% 63% 61% 64% 54%

23%

19%26%

18%

22%

13% 9%7%

11%11%

5% 5% 4% 4%4%

2% 3% 2% 4%5%

1% 1% 1% 3%

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Internet Mobile & TelecommunicationsSoftware (non-internet/mobile) Computer Hardware & ServicesElectronics Consumer Products & Services

AD, SALES & MARKETING

LEADS EXIT ACTIVITY IN 2016

In 2016, there were 54

venture-backed advertising, sales, & marketing exits. Among

them were marketing tech companies AppLovin and Circulate,

exiting for $1.4B and $140M, respectively.


TOP SUB-INDUSTRIES OF VC-BACKED TECH EXITS2016

54

36

29

27

22

21

20

18

18

15

15

15

13

13

12

12

11

Advertising, Sales & Marketing

Business Intelligence, Analytics &…

Marketplace

Customer Relationship Management

Healthcare

Monitoring & Security

Social

Apparel & Accessories

Gaming

News & Discussion

Education & Training

Payments

Collaboration & Project Management

HR & Workforce Management

Travel (internet)

Health & Wellness

Video

UNICORN BIRTHS DOWN,

BILLION DOLLAR EXITS UP IN 2016

After drawing even in

Q3’16, unicorn births surpassed the number of $1B+ tech exits in Q4’16.

There were 18 tech exits

of $1B or more in 2016 including Cruise Automation, Jet, Dollar

Shave Club, Skyscanner, and many more.


NEW VC-BACKED TECH UNICORNS VS VC-BACKED TECH

EXITSQ1’15 – Q4’16

1

6

0

5

2

5

8

3

15

2524

13

6

4

7

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

$1B+ Exits New Unicorns

THE TOP 10 VC-BACKED

EXITS IN 2016 WERE VALUED AT $1.4B+

3 out of the top 5

venture-backed exits were of companies based outside the US,

including China-based Ucar Group and Meitu, as well as UK-based

Skyscanner.

The top 5 venture-backed companies all exited at or above a $1.7B

valuation.


TOP 10 VC-BACKED TECH EXITS2016

$5.5 billionIPO

$4.9 billionIPO

$3.3 billionAcquisition (Walmart)

$2.2 billion

IPO

THIS SLIDE HAS BEEN UPDATED

See ‘Top Exits’ tab in excel for updated raw data

$1.7 billion

Acquisition (Ctrip.com)


EXITS IN 2016 WERE VALUED AT $1.4B+

The last 5 companies

here span marketing, e-commerce, ad tech, and digital health.



Corporate Majority (Alibaba Group)

$1.5 billion

$1.4 billion

Corporate Majority (SES)

$1.5 billion

Corporate Majority (Dentsu Aegis Network)

$1.7 billion

IPO

Acq-Fin (Orient Hongtai Shihe Investment Management)

$1.4 billion


TECH EXITS

7 of the top 20 exits were

IPOs including Nutanix, NantHealth, Twilio, and The Trade Desk, among

others.

All of the top 20 venture-backed exits were $900M or more in exit

value.



RANK COMPANY VALUATION ($B) EXIT TYPE RANK COMPANY VALUATION ($B) EXIT TYPE

1 Ucar Group $5.5 IPO 11 Jasper Technologies $1.4 M&A

2 Meitu $4.9 IPO 11 SquareTrade $1.4 M&A

3 Jet.com $3.3 M&A 13 Twilio $1.2 IPO

4 Nutanix $2.2 IPO 14 Sitecore $1.1 M&A

5 Skyscanner $1.7 M&A 15 Takeaway.com $1.1 IPO

6 NantHealth $1.7 IPO 16 Dollar Shave Club $1.0 M&A

7 Lazada $1.5 M&A 16 The Trade Desk $1.0 IPO

7 Merkle $1.5 M&A 16 Cruise Automation $1.0 M&A

9 O3B Networks $1.4 M&A 19 Heptagon Micro Optics $0.9 M&A

10 AppLovin $1.4 M&A 20 ServiceMax $0.9 M&A



2016 M&A and IPO League Tables

SV ANGEL AND INTEL

CAPITAL LEAD THE WAY

SV Angel and Intel

Capital round out the first and second spots for most tech exits in 2016.

500 startups took the third spot and was an investor in companies

like Twilio which went public in 2016 at a $1.2B valuation.


TOP VC INVESTORS IN EXITED TECH COMPANIES2016

RANK INVESTOR RANK INVESTOR

1 SV Angel 13 Salesforce Ventures

2 Intel Capital 13 Bessemer Venture Partners

3 500 Startups 15 Qualcomm Ventures

4 Norwest Venture Partners 15 New Enterprise Associates

4 Andreessen Horowitz 15 BoxGroup

6 Lerer Hippeau Ventures 18 FundersClub

7 General Catalyst Partners 18 Kleiner Perkins Caufield & Byers

7 Accel Partners 18 Index Ventures

7 Draper Fisher Jurvetson 21 First Round Capital

10 Sequoia Capital 21 CrunchFund

10 Slow Ventures 21 Battery Ventures

10 Google Ventures

TOP VC INVESTORS IN EXITED TECH COMPANIES

INTEL AND GV CONTINUE

TO KEEP IT CLOSE IN 2016

Intel continues its prolific

run as a CVC investor realizing the most exits among corporates and

CVCs in 2016. GV and Salesforce Ventures took the next two spots in

realized exits in 2016.


TOP CVC AND CORPORATE INVESTORS IN EXITED TECH

COMPANIES2016

RANK INVESTOR RANK INVESTOR

1 Intel Capital 14 Samsung Ventures

2 Google Ventures 14 Motorola Solutions Venture Capital

3 Salesforce Ventures 14 Digital Garage

4 Qualcomm Ventures 14 WME/IMG

5 Tencent Holdings 18 SingTel Innov8

6 In-Q-Tel 18 Robert Bosch Venture Capital

7 Nokia Growth Partners 18 Citi Ventures

8 Comcast Ventures 18 Tengelmann Ventures

9 Time Warner Investments 18 DG Incubation

9 GE Ventures 18 Deutsche Telekom Strategic Investments

9 Cisco Investments 18 DeNA

9 Bertelsmann Digital Media Investments 18 Naspers

9 Liberty Global Ventures 18 Unilever Ventures

TOP CVC & CORPORATE INVESTORS IN EXITED TECH COMPANIES

GOOGLE WAS THE MOST

ACTIVE ACQUIRER IN 2016

Google was the most

acquisitive company in 2016 buying companies like EyeFluence and

API.AI. The second spot was tied between Salesforce and

Accenture followed by J2 Global in the fourth spot.


TOP TECH ACQUIRERS2016

Rank Acquirer Select Acquisitions

1

2

2

4

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Documents

2016 Global Tech Exits€¦ · In 2016, there were 1650+ M&A exits and 25 IPOs in the US. IPO activity increased in the second half of 2016 with 17 US tech IPOs compared to the first