According to IPO exchange-traded fund manager Renaissance Capital, 2014 saw 275 companies going public on U.S. exchanges, raising more than $85 billion. This marked the largest year for U.S.-listed IPOs by both number and proceeds raised since 2000.
Of these, the IPO of Alibaba Group Holding (NYSE:BABA) was probably the most awaited event. The colossal Chinese e-commerce company launched the biggest IPO on record in September, raising $25 billion.
The interest generated by the tech IPOs this year can be attributed to the strong revenue growth rates they exhibited. Tech IPOs have been dominated by companies in the Internet and digital media market, and software, many of which have profited from software-as-a-service category, cloud computing and the robust growth of mobile technology.
The IPO market shows no signs of slowing down in 2015.
According to Linda Killian, IPO portfolio manager at Renaissance, around 107 companies are planning for an IPO next year, seeking to raise $19.3 billion overall. This excludes confidential filings under the Jobs Act. This act allows companies with revenues below $1 billion to keep their financial information confidential until weeks before they are set to trade.
Renaissance reports that besides these 107 companies, another 36 companies are known to have either in private filed or have selected banks for an IPO. It has also identified another 219 likely to go public.
This is a positive sign for the U.S economy as young growth companies contribute immensely to new jobs. Expected IPOs in 2015 include Uber, Spotify, and Airbnb. Other possible candidates include web registration and hosting service provider GoDaddy, cloud storage providers Box and Dropbox, and online video streaming service Roku.
It remains to be seen which of these expected IPOs will be the Alibaba of 2015.
Alibaba currently holds a Zacks Rank #3 (Hold). Better-ranked stocks in this industry include Geeknet, Inc. (NASDAQ:GKNT), Mercadolibre, Inc. (NASDAQ:MELI)) and Stamps.com Inc. (NASDAQ:STMP). While Stamps.com sports a Zacks Rank #1 (Strong Buy), Mercadolibre and Geeknet carry a Zacks Rank #2 (Buy).