I apologize in advance for adding another “year in review” piece to your newsfeed. I’ll keep it simple: If 2014 could be summed up in one photo, it would be this one:
Between the record-setting public offering of the Alibaba Group (China’s version of eBay and Amazon) and the $1.8 billion in private funding raised by Uber, the business of raising money was booming in 2014.
More specifically, 2014 killed it in terms of Initial Public Offerings (I.P.O.s). An I.P.O. is the first sale of stock by a private or public company to the public, hence the term “going public.” Companies often go public to raise cash. Going public also offers a company the chance to get better rates when issuing debt and that their assets will have a high level of liquidity (which means that they can be bought or sold more easily). According to Thomson Reuters, approximately 1,205 issuers raised nearly $250 billion globally, with 40 percent more companies going public this year than in 2013.
Even without the impact of the Alibaba Group (an event that bankers agree is a once-in-a-generation occurance), 2014 was still a record-setting year.
This is due in part to the success of start-ups, with 192 of the top technology start-ups raising $12.9 billion, up from just $5 billion in 2013 (think new rounds of capital raising by Dropbox, Airbnb and Xiaomi). These venture capital successes rival even the publicly traded companies, with multiple start-ups valued at the 11-digit mark this year.
Like anything with the global economy, it’s not all sunshine and rainbows. Some analysts are concerned that it will be difficult to sustain such a high level of success in 2015, and have even compared the “start-up age” to the dot-com “boom and bust” of 1999-2000.
This concern, coupled with the falling price of oil, China’s slowing economy and the very real fear of cyber attacks, has generated warranted skepticism among experts concerning the economic stability of 2015.
Catch the full story over at The New York Times.
