For US tech IPOs, precious little new blood amid the larger bleed-out

Contact: Brenon Daly

Over the past month it’s been ‘one on/one off’ for publicly traded marketing automation vendors. In mid-May, we saw Marketo debut on the Nasdaq. (If rumors are to be believed, incidentally, Marketo only made it to market after stiffarming some would-be buyers.) On the other side, earlier this week we saw ExactTarget announce plans to depart the NYSE, selling for an industry-record $2.5bn a little more than a year after its own IPO.

Leaving aside the vast gap in value left by the two events – Marketo currently trades at less than one-third of ExactTarget’s terminal value – at least there’s some replacement in this sector. That isn’t true for most of the tech industry. In terms of the overall number of tech companies on US exchanges, there’s been precious little fresh blood to offset a continual bleed-out.

Looking broadly at the enterprise tech market so far this year, we’ve tallied a half-dozen IPOs, with half of those coming in the past month alone. In addition to Marketo, May also saw the listings of ChannelAdvisor and Tableau Software. That trio joined Marin Software, Model N and Rally Software Development as the Class of 2013 so far.

So that’s six new entrants to the ranks of US publicly traded tech companies, an average of about one IPO each month this year. (And keep in mind, this rate is post-JOBS Act, which supposedly made it easier for companies to come public.) Against those new arrivals, we have seen some 20 US public companies acquired so far this year, according to The 451 M&A KnowledgeBase.

That rate equals three tech companies erased from US exchanges for every one that joins. Many of these deals are taking major companies – which, in some cases, have traded for a decade or even longer – off Wall Street: Dell, BMC, Acme Packet, Websense and others. The debutantes just can’t keep pace with the departures.

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