IPO window re-opening for some

No venture-backed companies have made a market debut this quarter. But based on the volume of new filings from VC-funded companies, a growing number are preparing to launch.

Since the beginning of April, 11 venture-backed companies have filed to go public (see table). The companies, which run the gamut from Web hosting to drug discovery to transportation logistics, are seeking to raise more than $1.3 billion combined in new offerings.

The flurry of new filings comes amid a bullish streak for broader markets. The Nasdaq Composite Index closed last Thursday just over 2,500, up nearly 15% since mid-March. Public market investors also found some solace in comments from Federal Reserve Chairman Ben Bernanke. In a speech last week, he said that he was “encouraged by the recently demonstrated ability of many financial institutions, large and small, to raise capital from diverse sources.”

Bernanke’s comments come at a time when the IPO market has been dry, to say the say the least, for VC-backed companies. Only five venture-backed IPOs totaling $282.7 billion in combined proceeds were issued in January, February and March. The volume represents the lowest quarterly number of new public offerings since the second quarter of 2003, when there were two issues.

A number of venture-funded companies are betting that as markets recover, so will IPO demand.

Rackspace, a provider of managed Web hosting services, filed for the largest IPO. The San Antonio-based company is seeking to raise $400 million through an offering on the New York Stock Exchange. Norwest Venture Partners and Sequoia Capital are the largest venture stakeholders in the company, which raised $48 million from VCs between 1999 and 2005.

But while new IPO candidates entered the pipeline, two nixed their public offerings in May: Elixir Pharmaceuticals, which makes therapies to treat metabolic diseases, and Emphasys Medical, a maker of minimally invasive devices to treat emphysema.

Elixir raised $109 million in funding between 2000 and 2007 from Arch Venture Partners, MPM Capital, Oxford Bioscience Partners and other investors, according to venture data gathered by Thomson Reuters (publisher of PE Week).

For its part, Emphasys raised $73 million between 2000 and 2006 from Morgenthaler Ventures, New Enterprise Associates, St. Paul Venture Capital and others.

Emphasys and Elixir are among several life sciences companies that have withdrawn planned offerings this year, amid weak demand from retail investors. Technology companies appear to be filling in the gap and account for the majority of new filings.