IPO frenzy gives investors confidence to back emerging markets, says venture capital boss
IPO frenzy gives investors confidence to back emerging markets, says venture capital boss
Author : City AM
1 min. Read

In early 2021, after months of volatility, Covid-19 vaccines started to offer hope, with business sentiment slowly recovering, and growing ever more optimistic as forecasts remain strong, and new variants seem to be covered by the inoculations.

IPOs and mergers and acquisitions continue to grow in value and quantity from their already-strong performance in 2020, and this year is off to a flying start.

According to EY, the global IPO market in Q1 saw 430 deals, raising $105.6bn in proceeds, increasing by 85 per cent and 271 per cent year-on-year, respectively.

After being pent-up for so long, capital is now raring to go, searching out new opportunities across the globe, whether towards new and exciting IPOs, or funding rounds for ambitious startups.

Appetite for emerging markets

London-based venture capital firm JPIN VCATS commissioned research to look into the desires of British investors towards emerging markets, such as India, Vietnam, Indonesia and the Philippines. The findings were shared with City A.M. today.

The firm found that nearly many UK investors favour emerging markets, with 29 per cent of them wanting to invest in fintech, over a third plans to pump equity in the biotech and pharmaceuticals sectors, while a fifth is zooming in on startups and 36 per cent is looking at stocks and shares.

According to Gaurav Singh, JPIN VCATS’ co-founder, 2020’s strong finish provided “an excellent platform” for 2021.

“We are seeing the results of this now. Markets have benefited from the abundance of liquidity that was injected into the system by governments in the wake of the pandemic,” he told City A.M.

This has resulted in record levels of IPO activity in some major markets, with several experience more than in the past 20 years, according to IPO Eye.

“2020 was difficult for many, and although economies shrunk, some businesses grew and desires for investment opportunities were frustrated for almost an entire year. We are seeing these desires released in 2021,” Singh continued.

“The IPOs really show the confidence that private capital has in these new and ambitious businesses entering the stock market, and as they find footholds in strong economic growth figures around the world, these new businesses should go from strength to strength, with plenty of international backers,” he concluded.

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