January 3, 2005 11:01 AM PST

Tech IPOs 'rise from the ashes'

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Start-ups that survived the bursting of the Internet bubble are finally finding their pot of gold.

Data on initial public offerings from the past year showed that more than half of the companies that went public in 2004 were founded between 1997 and 2000--the height of the dot-com investment bubble.

The figures, released Monday by Thomson Venture Economics and the National Venture Capital Association (NVCA), indicate that the financial environment is improving for young companies looking to raise money on public markets, said Mark Heesen, president of NVCA.

"The public markets are now embracing many of these companies that went through the bubble burst and lived to tell," Hessen said in a statement. "We expect to see more of the same in 2005 as these phoenixes rise from the ashes."

One former highflier from the dot-com era on Monday become one of the first companies to go public in 2005: Napster. But the online music service, which has lived a couple lives already, got off to an inauspicious start. By late in the trading day, it was at $8.88, a good drop from its opening price of $10.

Last year saw a substantial improvement in the overall initial public offering (IPO) picture. After a relatively quiet IPO market from 2001 to 2003, the number of venture-backed public offerings picked up sharply in 2004, fueled by an uptick in the number of technology and life sciences companies.

The number of venture-backed IPOs last year was 93, representing $11 billion in raised capital, compared to 29 public offerings in 2003, valued at $2 billion, according to the release. Of the 93 venture-backed outfits to go public, 42 are technology companies and 41 are in the life sciences industry.

Perhaps the most high-profile technology public offering of last year was that of search giant Google, which saw its value explode to $23 billion after its IPO.

Other technology companies to crack the list of the year's top 20 IPOs in the United States included Semiconductor Manufacturing International, DreamWorks Animation, InPhonic, Shopping.com, SalesForce.com, Atheros Communications, PortalPlayer, and Shanda Interactive Entertainment.

Researchers at the NVCA and Thomson Venture Economists expect that the new year will see another large number of venture-backed IPOs. As of the end of 2004, there were 57 companies preparing for IPOs by registering their plans with the Securities and Exchange Commission.

 

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