Tech IPOs in the US market has fallen to a 7 year low. Year to date, only 11% of IPOs in the US involved tech companies for comparison during the financial crisis in 2008 only 10% of IPOs involved tech companies. With large valuations in the private markets and poor performance of recent IPOs the motivation for strong performing startups to go public is waning.
The data send a strong signal that the broader markets aren’t eager to buy everything venture capitalists are selling, threatening the outlook for what has been one of the most robust segments of the U.S. investment landscape. The stakes are high for early investors who rushed to buy stakes in still-private companies like luxury retailer Gilt Groupe Inc. and wearable-device maker Jawbone. There are now at least 117 private companies valued by venture firms at $1 billion or more, nearly double the number from a year ago. Those investors could have trouble cashing in if the IPO market isn’t able to support even higher valuations.