IPO Market Coming Back To Life

A return of the IPO market will be significant for some UK start-ups which are on the verge of profitability.

Europe could be set to raise £12 billion in IPOs over the next two years reckon City experts, while $12 billion has already been raised worldwide from IPOs during this year.

These 2009 IPOs include Vodafone IPO-ing its Qatari operation in a $900 million deal; the $4 billion Brazilian float of Visanet; and the $1.3 billion raised by the flotation of the mining company Zhongwang Holdings in China.

America is leading with 12 IPOs this year. Computer company Rosetta Stone raised $129 million, and two other technology start-ups OpenTable and SolarWinds have seen their shares rise since IPOs earlier in the year.

LogMeIn of Massachusetts, which IPO'd yesterday, is a software company which has five per cent of its shares held by Intel. It raised  $106.7 million yesterday by selling 6.7 million shares at $16 apiece, after recording its first quarter of profitability in Q1 2009.

The company provides software that enables users to set up private, remote networks. It has a 'shredding' service which includes a device installed on a notebook PC which tracks the PC and can encrypt or delete data remotely. Revenue to the end of March was $17.2 million.

The first day's trading for LogMeIn shares on the Nasdaq exchange is today.  After three hours of dealing, by 4pm UK time, the shares had hit $20.

 Successes like these are changing the US mind-set on IPOs, and it's exactly what the UK needs too.

Which English company looks ripe for a high-tech, morale-boosting IPO? Set forward five year old XMOS Semiconductor of Bristol which should be making profits next year, and is already shipping in volume.

A juicy IPO is just what the UK needs to whet the appetites of VCs, business angels and the government's many start-up stimulus agencies for putting more money into high-tech UK start-up companies.