Lonergan SV150 Insights - 2020

The Lon­er­gan SV150 is the defin­i­tive list of the top pub­lic com­pa­nies in tech­nol­o­gy locat­ed in the Sil­i­con Val­ley. It is the suc­ces­sor to the SV150 list pub­lished for over thir­ty years by The Mer­cury News.

As we do more analy­sis of the trends and sto­ries of the Lon­er­gan SV150, we will post our insights on this page. Check back peri­od­i­cal­ly or fol­low us on Twit­ter and LinkedIn.

2019 Lon­er­gan SV150 rev­enues grow more slow­ly but still top $1 tril­lion for the sec­ond con­sec­u­tive year

The Lon­er­gan SV150 had total 2019 rev­enues of $1.183 tril­lion, which rep­re­sents 8% same com­pa­ny growth year-over-year. Growth slowed sig­nif­i­cant­ly from 2018, when sales grew by 16%. #1 ranked Apple (rep­re­sent­ing 23% of Lon­er­gan SV150 rev­enue) con­tin­ued to be a major con­trib­u­tor to slow­ing growth. Apple grew cal­en­dar year 2019 rev­enues by only 2%, ver­sus 9% rev­enue growth for the 2018 cal­en­dar year (Apple fis­cal year adjust­ed per our rank­ing method­ol­o­gy; the Apple fis­cal year end­ed Sep­tem­ber 30, 2019). With­out Apple, the Lon­er­gan SV150 grew 9%.

Total net income for the Lon­er­gan SV150 was $190 bil­lion, down $3 bil­lion from the pri­or year. As of mid July 2020, mar­ket cap was up an astound­ing 57%, from $4.9 tril­lion to $7.7 tril­lion, despite the mar­ket volatil­i­ty in the past few quarters. 

Acquisition activity roller coaster: 2019 peak giving way to 2020 valley

A total of 13 Lonergan SV150 ranked pub­lic com­pa­nies have been ful­ly acquired and delist­ed since our ranking last year. These include Symantec, Cypress, Shutterfly, Finisar, Mellanox, EFI, Tivo, Pivotal, Wageworks, Genomic Health, Nanometrics, Quantenna, and Aerohive.

All but three of the thirteen acquisitions since last year’s ranking occurred in the second half of 2019. In 2020, the impact of Covid-19 was felt as a slowdown in new deals announced in Q2. However, as of the time of this analysis in July, 2020, several additional LSV150 ranked companies are in the process of being acquired, including #54 ranked Maxim, #61 ranked FitBit, and #123 ranked Forescout .

Despite the compression of the activity timeline, this year's Lonergan SV150 update represents a high level of acquisition activity.  On our last list, there were only eight companies departing through acquisition. Historically, the peak year for M&A among large public companies on the list was 2016, when 18 companies on the prior year’s list went away. 

The largest company on last year’s ranking to be acquired was #30 (2019 list) ranked Symantec, which was bought by Broadcom in a 2019 deal said to be worth $10.7 billion. Broadcom has since spun off Symantec’s cybersecurity business in April 2020.

Slow­down in IPOs

Sev­en recent IPOs (last 12 months) are debut­ing on the Lon­er­gan SV150 this year, a slow­down from last year’s list, which boast­ed ten new IPOs, with mega-IPOs Uber (LSV #18 in 2019) and Lyft (LSV #48 in 2019) amongst them.

The high­est rank­ing debut IPO on the Lon­er­gan SV150 is #84 ranked Slack, with 2019 rev­enues of $630 million. 

Although Q2 did not see much new pub­lic debut activ­i­ty, recent weeks have seen an uptick in IPO fil­ings nation­wide, with Palo Alto-based data analy­sis com­pa­ny Palan­tir fil­ing on July 6, 2020 for a direct debut antic­i­pat­ed in July or August 2020. Palan­tir reports 2019 rev­enues of $739 mil­lion, which would have placed it at rank #89 on this years list.

All sev­en IPOs new to the list are shown below:

Mar­ket cap reflects val­ue on July 20, 2020. 

The South Bay hangs on as geo­graph­i­cal hub for Lon­er­gan SV150 headquarters 

The South Bay is still the cen­ter of grav­i­ty for the pub­lic com­pa­ny tech world. Despite VC and start-up com­pa­ny flight north­wards, the South Bay (from Moun­tain View south to San Jose and includ­ing Fre­mont) hous­es well over half of the head­quar­ters for the Lon­er­gan SV150. Despite the depar­ture of many a South Bay based pub­lic com­pa­ny in the past ten years, the list of large South Bay based pub­lic tech com­pa­nies con­tin­ues to be replen­ished at a fair­ly con­stant rate.

By con­trast, while San Fran­cis­co is home to only 21% of Lon­er­gan SV150 head­quar­ters, its mar­ket share has been steadi­ly ris­ing; San Fran­cis­co boasts the head­quar­ters of four of the sev­en 2019 IPOs on the list. San Fran­cis­co coun­ty is sec­ond ranked among the sev­en coun­ties rep­re­sent­ed in our rank­ing (oth­er coun­ties are San Jose, San Mateo, Alame­da, Con­tra Cos­ta, Marin and San­ta Cruz). It’s pop­u­lar­i­ty seems to be com­ing at the expense of Alame­da and San Mateo counties.

• 84 of the com­pa­nies in the Lon­er­gan SV150 are head­quar­tered in San­ta Clara county.
• Four of sev­en IPOs debut­ing on the list are head­quar­tered in San Francisco 

Women CEOs still rare (though there’s one more than last year — again)

Despite an unprece­dent­ed lev­el of atten­tion focused on the issue of women in tech, the num­ber of women CEOs rep­re­sent­ed on the list went up by only one ver­sus 2019. With the acqui­si­tion of Genom­ic Health (#111 on the 2019 list), we said good­bye to long-time CEO Kim­ber­ly Popovits. How­ev­er, we now can cel­e­brate the arrival of Hay­den Brown, CEO of Upwork (LSV #130); and Jen­nifer Teja­da, CEO of Pager­Du­ty (LSV #150).

The cur­rent eight women CEOs of the Lon­er­gan SV150 are:

• Safra Catz, Ora­cle (LSV #7)
  
• Lisa Su, AMD (LSV #26)
• Jayshree Ullal, Arista (LSV #49)
• Kat­ri­na Lake, Stitch Fix (LSV #58)
• Lynn Jurich, Sun­run (LSV #86)
• Julia Hartz, Eventbrite (LSV #122) 
• Hay­den Brown, Upwork (LSV #130)
• Jen­nifer Teja­da, Pager­Du­ty (LSV #150) - IPO 2019
  
  

Twice the num­ber of women serv­ing as Board Chairs since our 2015 study

Women sit­ting in the Board Chair’s seat at pub­lic tech­nol­o­gy com­pa­nies rep­re­sent a grow­ing crack in the gov­er­nance glass ceil­ing. In our ongo­ing analy­sis of pub­lic tech­nol­o­gy com­pa­nies in the Sil­i­con Val­ley, we are start­ing to see an increase in the num­ber of women exec­u­tives take on this lead­er­ship role.

The table below lists the eight Lon­er­gan Sil­i­con Val­ley 150 com­pa­nies with women Chairs as of July, 2020.

Table reflects board infor­ma­tion col­lect­ed from com­pa­ny web­sites on July 17, 2020

In our 2015 land­mark look at Sil­i­con Val­ley 150 boards, there were only four Sil­i­con Val­ley 150 com­pa­nies with women chair­men. These com­pa­nies and Chairs were: Hewlett Packard (2015 SV#2: Chair was CEO Meg Whit­man); Oclaro (2015 SV#102: Chair was Maris­sa Petersen); Affymetrix (2015 SV#106: Chair was Jami Dover Nach­steim); Genom­ic Health (2015 SV#119: Chair was CEO Kim­ber­ly Popovits). HP was split into two new pub­lic com­pa­nies, while Oclaro, Affy­met­ric and Genom­ic Health were all acquired.

“Chair” title enjoys a sud­den gain in popularity

As recent­ly as Sep­tem­ber of 2019, we found half of the women chair­ing boards of the LSV150 used the title ​“Chair­man.” Today, com­pa­ny web­sites show all but one of the women using the titles ​“Chair­per­son” or ​“Chair.”

Dual class stock own­er­ship struc­tures pop­u­lar at founder-led IPOs

This year the num­ber of Lon­er­gan SV150 com­pa­nies uti­liz­ing a dual class stock own­er­ship (DCSO) struc­ture climbed from 27 to 29. This growth is a func­tion of its pop­u­lar­i­ty with new IPO CEO-founders. Over half of the new IPOs that hit the list this year employ a DCSO struc­ture, and all are founder-led. Com­pa­nies with this type of struc­ture have a sep­a­rate​“super-vote” class of stock typ­i­cal­ly con­trolled by insid­ers only.

IPOs Using DCSO

1. Slack (LSV #94) IPO 2019 under CEO-founder Stew­art But­ter­field — post IPO vot­ing pow­er 7.5%
2. Crowd­strike (LSV #102) IPO 2019 under CEO-founder George Kurtz — post IPO vot­ing pow­er 22.42%
3. Cloud­flare (LSV #131) IPO 2019 under CEO-founder Matthew Prince — post IPO vot­ing pow­er 23% 
4. 10x Genomics (LSV #135) IPO 2019 under CEO-founder Sergei Sax­onov — post IPO vot­ing pow­er of Class B stock 7% and of Class A stock 1% 

By con­trast, none of the CEOs at recent IPOs NOT employ­ing a DCSO struc­ture were called founders. 

IPOs Not Using DCSO

1. Medal­lia (LSV #113) IPO 2019 under CEO Leslie Stretch — post IPO vot­ing pow­er 3.6% 
2. Livon­go Health (LSV #149) IPO 2019 under CEO Zane Burke — post IPO vot­ing pow­er 1%
   
3. Pager­Du­ty (LSV #150) IPO 2019 under CEO Jen­nifer Teja­da — post IPO vot­ing pow­er 5.9%

Note: Source for vot­ing pow­er comes from the 2020 proxy.

Of the 29 com­pa­nies on the LSV150 with DCSO struc­tures, twen­ty-five have founders in the role of CEO.