It's not exactly raining money in Silicon Valley these days, but the market for technology IPOs is finally coming back to life. A look at new offerings in the first quarter of 2011 showed that seven tech companies went public, compared to just three in the same period in 2010, according to a survey by PwC (previously named PricewaterhouseCoopers).
Semiconductor companies accounted for four of the new tech IPOs, while another specializes in near-field communications (NFC), an enabling technology for mobile payments. And it's worth noting that there isn't a Pets.com in the bunch, which tells me that we're not seeing a repetition of the brainless feeding frenzy of the late 1990s that led to the dot-com implosion.
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You have to be careful about drawing conclusions from a relatively small number of data points. But a look at the type of companies attracting serious investor money does give us an idea of what the technology landscape will look like over the next few years.
It's no surprise, but there were exactly no companies on the list utterly dependent on the classic IT products, software, or services needed in a PC-centric world. Instead, we see technologies centered on consumer electronics, mobile communications, and medical services.
The surge in newly public technology companies came as the IPO market as a whole posted one of its strongest first quarters in years, with investors forking out more than $12.4 billion, a threefold increase over last year. Additionally, it appears that the pipeline for future IPOs is promising, meaning that the impressive first quarter is not a flash in the pan, said Howard Friedman, a partner in PwC's transaction services who works with fledgling companies.
Average deal size increased 166 percent to $387.8 million in the first quarter 2011 from $145.7 million in 2010, another sign of investor optimism.
None of that means we're out of a recession that has thrown hundreds of thousands of IT workers onto the unemployment lines. Joblessness in Santa Clara County, the heart of Silicon Valley, is still 10.3 percent, compared to 8.9 percent in the United States as a whole. And three of the tech companies going public are based in Asia, so they're not likely to hire many workers in our part of the world.