US IPO volume has declined by almost a quarter year-over-year, according to EY’s recent Global IPO trends report.  To date, $44.5 billion in proceeds have been raised in 127 IPOs, 23% less than at the end of Q3 2018. The third quarter of 2019 alone saw 39 IPOs in the US, which raised $11.9 billion, down 30% by number of deals.  Median deal size in Q3 2019 was $125 million, an 8% increase compared to Q3 2018, and the median post-IPO market cap for companies was $708 million according to the report.

For the last several years, healthcare and technology companies have dominated the IPO market, and this was no different in Q3 2019. Healthcare IPOs raised $3.9 billion across 13 IPOs. Among those companies, Smile Direct Club, a direct-to-consumer platform for orthodontic products, had the largest IPO in the third quarter, raising $1.3 billion in proceeds.  12 technology companies went public in the third quarter, raising $4.4 billion.  To date in 2019, there have been 53 healthcare IPOs, which have raised $11.0 billion in aggregate, and 39 tech IPOs, which have raised $22.6 billion in aggregate.

To date, 52% of companies that have gone public in 2019 have been financial sponsor-backed. This is an 80% increase year-over-year, consistent with our observations in previous blog posts.

Despite the market volatility experienced during the third quarter of 2019, the report indicates that the many large issuers that remain in the IPO pipeline may accelerate IPO activity in the final quarter of 2019 in part in order to avoid potential volatility associated with the election year.