Wednesday, June 13, 2007

Good year for IPO

I sat down at the Morgan Stanley annual CTO summit and listened to a presentation on the tech IPO market in 2007. Things are starting to look pretty good as the level of tech IPO is the highest since the year 2001.

Investors are not looking anymore for three quarters of profitability and will favor growth over profitability. In 2007, 70% of the company going IPO are either not profitable or have only one break even quarter. However, those companies still need to show significant level of revenue around 25 million per quarter.

Cleantech is now a recognized space. Since 2006, the sector has had as many as IPOs as the Internet or the Software industry. Specifically, in the software space, next gen data center, SaaS, Web 2.0 and Next Gen Networking a la triple play are favored, which is not really surprising.