By Kevin Kelleher, contributor
FORTUNE – Last week, Silver Spring Networks went public on the New York Stock Exchange, an event notable not merely for being the stock market debut of a clean-tech star, but also because it was only the second technology IPO of the year.
Silver Spring (SSNI) raised $81 million in an offering priced at $17 a share. Its stock is trading 25% higher. Last month, Xoom (XOOM), an online money-transfer service, raised $101 million; its stock is 41% above its $16 offering price. And Professional Diversity Network (IPDN), an online job-networking site, raised $21 million. It's currently 17% below its $8 offering price. Other IPOs so far this year -- like Health Insurance Innovations (HIIQ) -- mention the cloud or online platforms in their business models but are more focused on other industries like health insurance.
In other words: We're nearly a quarter of the way through 2013, and three companies have raised $203 million.
This is not what investment banks were hoping for in the wake of the long-awaited Facebook (FB) IPO, which was once expected to reignite a recession-battered IPO market the way Google's (GOOG) 2004 offering wiped away all the bad memories of the dot-com crash.
Ever since Apple (AAPL) went public in December 1980, technology startups looked forward to the chance to go public. The dot-com mania cooled investor interest for a few years, but names like LinkedIn (LNKD), OpenTable (OPEN), and Zynga (ZNGA) received warm welcomes. But ever since the glitch-plagued Facebook IPO last May, all but a handful of tech companies have braved the IPO pipeline.
In 2011, 44 tech companies went public on U.S. exchanges, raising $9 billion, or 27% of the total proceeds raised in all industries, according to Renaissance Capital. If you factor out Facebook's $16 billion IPO, then in 2012 only 37 tech companies went public, raising $4.4 billion, or 17% of the total. This year's pace so far is dramatically slower.
More tech companies are in the pipeline, including Model N, a life-sciences software company that hopes to raise as much as $94 million; and Marin Software, a cloud-based ad-management company, which is looking to sell as much as $91 million in shares.
But such modest deals are the exception to companies that aspire not to deal with the onerous duties of being a publicly traded company. (They seem to prefer to be acquired by a bigger company or, simply, to stay public as long as possible.) Groupon (GRPN) serves as a cautionary tale to startups that follow the IPO route. Rebuffing Google's $6 billion offer in 2010, Groupon went public and is currently valued at just $3.5 billion.
In an illustration of how dreadful the idea of an IPO market has become to tech-startup founders, a panel of VCs, investment bankers, and attorneys convened at the f.ounders conference, which has been described as a Davos for geeks. The panel's title: "The road to IPO." Its bottom-line message: "Don't go public." (Keep in mind that this panel was hosted at Nasdaq's MarketSite in Times Square.)
The troubled Facebook IPO is only one reason for the new aversion to tech IPOs, and one of the lesser ones. Nasdaq's trading glitches last May only underscored bigger factors that put tech founders off: the increased scrutiny of investors and reporters, the quarterly earnings circus, the costs and complexity of Sarbanes-Oxley, the exposure to short-selling hedge funds, the specter of activist investors. Mark Zuckerberg put off a Facebook IPO as long as he could. Today, he can look back and wish the company were still privately held.
Many of the new crop of tech startups are much smaller operations than the biotech, manufacturing, or retail companies that fill up today's IPO queue. Those devoted to web sites or mobile apps are often no bigger than a couple dozen employees, or even fewer, who have found success.
In many cases, an acqui-hire by a giant like Facebook or Google offers a simpler exit strategy -- even if it means being swallowed into an entirely different corporate culture. For bigger web startups, secondary stock markets provide access to institutional funds and wealthy investors without the regulatory burdens and scrutiny of public markets. Small surprise that Nasdaq is working with SharesPost to create a market for private-company investments.
All of those factors have driven IPOs out of fashion in the tech industry. It's getting to the point where a tech IPO has lost its cachet -- even signaling a potential desperation for quick capital. In Silicon Valley, the IPO just isn't as cool as an acqui-hire. It's like watching everyone make a Harlem Shake video, and then dancing the Macarena.
With one $12.5B deal it gets two weapons: a manufacturing arm and a rich IP portfolio
Google's (GOOG) announcement Monday that it has agreed to buy Motorola's recently spun off mobile devices business -- listed on NASDAQ as Motorola Mobility (MMI) -- for $12.5 billion could mean one of two things.
Either Google really wants to get into the Android manufacturing business -- putting it into direct competition primarily with Apple (AAPL), MOREPhilip Elmer-DeWitt - Aug 15, 2011 9:14 AM ET
Acer's Iconia tablet looks as good as the XOOM on paper and is up for pre-order for $450.
If you've ever played with an Acer netbook, you'll know the computer maker isn't adept at turning out high end products. But the Taiwanese company makes a good mid-range product, and they do it with razor-thin margins. This strategy is part of the reason they canned their CEO Gianfranco Lanci last week, saying MORESeth Weintraub - Apr 8, 2011 10:13 AM ET
Similar charts have been published, but Engadget's is the best we've seen
Apple's (AAPL) edge over Motorola (MOT), Hewlett Packard (HPQ) and Research in Motion (RIMM) would be clearer if Engadget had included price, availability and number of apps.
You can get the original here.
Also on Fortune.com:
iPad 2: The analysts weigh in
Apple posts iPad 2 keynote video
Why aren't there cheaper tablets?
[Follow Philip Elmer-DeWitt on Twitter @philiped]Philip Elmer-DeWitt - Mar 3, 2011 7:02 AM ET
Motorola is going to do a riff on Apple's iconic 1984 Superbowl ad, touting its Honeycomb tablet.
For better or worse, Motorola (MMI) is planning a Super Bowl ad to introduce the world to its Google (GOOG) Android 3.0 Tablet. Here's a clip:
They released another teaser last week, but Motorola has told me this isn't actual footage from the commercial.
What's that saying about "if you've mentioned your competition in your ads, MORESeth Weintraub - Feb 4, 2011 2:42 PM ET
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"It's a complete work of fiction. There are no Victoria's Secret models in Silicon Valley ... I kind of wish my life were that cool." -- Former Facebook president Sean Parker on Justin Timberlake's portrayal of him in The Social Network (Reuters)Facebook issued a rare press release confirming it had raised $1 billion from investors in a deal MORE JP Mangalindan, Writer - Jan 24, 2011 6:00 AM ET
Leaked images reveal details about the Google tablet's launch.
Whether or not Motorola's (MOT) Xoom is the official Google (GOOG) Tablet in the way the Nexus One and Nexus S are official Google phones is uncertain. However, when Google has shown of Android on a tablet, they've shown off the Xoom, both at Dive into Mobile and CES.
It is pretty clear Xoom is Google's go-to Android 3.0 tablet, though Toshiba and MORESeth Weintraub - Jan 23, 2011 3:08 PM ET
A curated selection of the day's most newsworthy tech stories from all over the Web.
Groupon is moving ahead with an initial public offering (IPO), which is expected to happen some time this spring. The daily deals site, which just recently raised a record $950 million, now values itself at $15 billion. (New York Times)
The launch for News Corp's heavily-publicized iPad newspaper, the Daily, has reportedly been pushed back several weeks MOREJP Mangalindan, Writer - Jan 14, 2011 8:34 AM ET
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