There were an unprecedented 210 initial public offerings in U.S. markets between October 1, 2020, and December 31, 2020. Together, these 210 IPOs raised over $65 billion, an increase of over $56 billion from the same period last year and an increase of over $3.5 billion from last quarter. Similar to last quarter, IPO activity – at its all-time high since 2000 – was driven by blank check IPOs, which comprised 62.9% of the IPO market this quarter and 51.7% of the market for 2020 overall.
On an annual basis, as shown in the graph above, the number of IPOs in 2020 represents a 105% increase from 2019 and a 267% increase from 2016. This year’s 474 IPOs raised over $155 billion – the highest amount (in a single year of the IPO market) observed over the last 20 years.
There were nine unicorns this quarter with Airbnb, Inc. [ABNB], a home-rental service, leading the pack, followed by food delivery company DoorDash Inc. [DASH]. Airbnb raised the most among all IPOs this quarter, totaling $3.5 billion – the second highest amount in 2020.
Pershing Square Tontine Holdings, Ltd. [PSTH], a blank check special purpose acquisition company (SPAC), raised the most among all IPOs this year, totaling $4 billion – the largest ever IPO by a SPAC. However, Pershing Square ranks 12th highest among all IPOs since 2000. The highest non-SPAC that went public this year was Airbnb, Inc. [ABNB].
All told, there were a staggering 26 IPOs with proceeds greater than or equal to $1 billion this year:
Accounting and Legal Representation
The top IPO this quarter, Airbnb, Inc. [ABNB], was audited by PricewaterhouseCoopers and represented by Latham & Watkins and Simpson Thacher & Bartlett.
The top IPO this year, Pershing Square Tontine Holdings, Ltd. [PSTH], was audited by Marcum and represented by Cadwalader, Wickersham & Taft and Ropes & Gray.
Auditor Market Share
Together, the Big Four audited 60 IPOs (28.6% of the IPO market) in Q4 2020 and 180 IPOs (38.0% of the IPO market) for the year.
and all other firms [13%]
— Audit Analytics (@AuditAnalytics) January 19, 2021
Among all types of IPOs this quarter, Withum had 69 IPO audit clients – the most for all firms in Q4 – raising $18.8 billion. Marcum followed with 53 IPO clients, raising $14.2 billion.
As shown in the table below, Withum had a cumulative total of 138 IPO clients – the most for all firms in 2020 – followed by Marcum with 95 IPO clients. Withum’s clients raised the highest amount of all firms, bringing in over $41.3 billion, followed by Marcum’s clients, which raised over $28.9 billion this year.
Auditor Market Share – Excluding Blank Check Companies
Of the 210 initial public offerings in U.S. markets in Q4, 132 (or 62.9%) were blank check companies. A blank check company has no established business plan or operations and can serve as a vessel to engage in a merger or acquisition with an unidentified company, entity, or other person.
The table below displays the auditor market share for IPOs in Q4 2020, excluding blank check companies. Without blank check companies, the Big Four lead in terms of IPO count and amount raised. Together, these four firms audited 54 IPOs, or 69.2% of this market, in Q4 2020. EY led with 17 IPO audit clients, the most for all firms in Q4. In terms of gross proceeds, PwC’s 12 IPO clients brought in the most proceeds, totaling over $8.1 billion.
Of the 474 initial public offerings in U.S. markets in 2020, 245 (or 51.7%) were blank check companies. The table below shows the auditor market share for IPOs in 2020, excluding blank check companies. Without blank check companies, the Big Four hold the lead this year in terms of IPO count and amount raised. The Big Four audited 171 IPOs, or 74.7% of this market, in 2020. EY leads with 55 IPO audit clients, while PwC maintains its top spot in terms of gross proceeds, with 42 IPO clients raising over $26 billion.
Emerging Growth Companies
In Q4 2020, 198 of the 210 IPO companies, or 94.3%, elected to register as emerging growth companies (EGCs).
In 2020, 444 of the 474 IPO companies, or 93.7%, elected to register as EGCs.
Despite the emergence of COVID-19, this year has had the highest IPO activity since 2000. With major companies like Robinhood, Bumble, Instacart, and Nextdoor all indicating plans to go public, it will be interesting to see if the surge continues on in 2021.
This analysis uses data from the IPO database, powered by Audit Analytics.
For more information about Audit Analytics or this analysis, please contact us.
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