July 1, 2010 / 5:25 PM / 9 years ago

U.S. venture-backed IPOs show rebound as M&A slips

* 17 U.S. venture-backed IPOs worth $1.3 bln in Q2

* Q2 ‘10 had most venture-backed IPOs since Q4 ‘07

* Q2 venture-backed M&A declined compared with Q1

NEW YORK, July 1 (Reuters) - U.S. venture-backed initial public offerings are the highest since before the financial crisis, even as venture-backed M&A activity is slipping, according to a survey by Thomson Reuters and the National Venture Capital Association.

IPOs have always been a key exit strategy for venture capital funds, a path that was essentially closed off by the moribund stock market in much of 2008 and early 2009.

The number of venture-backed IPOs in the second quarter is the highest it has been since the forth quarter of 2007, according to the survey. There were 17 venture-backed IPOs worth $1.3 billion in the second quarter, which was the third consecutive quarterly increase in volume and the second in dollar amount.

Electric carmaker Tesla Motors Inc (TSLA.O), which raised $226 million, was the largest deal of the quarter and rose more than 40 percent in its debut.

But there are still signs of uncertainty. Only five of the 17 IPOs in the second quarter were trading at or above their IPO prices at the close of markets on Wednesday and the deal flow is still far below historic highs. There were 86 venture- backed IPOs worth $10.33 billion in the fourth quarter of 2007, the most recent peak in the venture-backed IPO market.

Google Inc’s (GOOG.O) acquisition of AdMob Inc for $750 million was the largest of the 92 venture-backed M&A deals in the second quarter. The second quarter represented a fall-off in both volume and dollar value from the first quarter. (Reporting by Clare Baldwin; editing by Andre Grenon)

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