Market showed skepticism toward Globoforce

That huge barrage of technology IPOs this year? It has fired its first dud.

Southborough software firm Globoforce Group PLC abruptly canceled its planned initial public offering late Thursday night, hours before its shares were expected to trade on Wall Street. The company cited unfavorable “market conditions,” though people in the financial sector said it is more probable investors were lukewarm toward Globoforce’s business.

Adley Bowden, director of research at PitchBook, a venture capital research firm, said Globoforce’s last-minute pullback also suggested the large financial institutions that typically invest in IPOs are becoming picky.

“It shows the markets are not totally crazy again,” Bowden said, alluding to past bubbles such as the one that caused the dot-com crash in 2000. “Investors are still looking at financials, still evaluating company by company.”

Globoforce provides cloud-based software that employers use to recognize workers for achievement, such as awards that can be cashed in at a network of e-commerce sites. The company receives a fee whenever those rewards are redeemed and reported revenues of $187 million last year, and a net loss of $6.5 million.

Earlier in the week Globoforce said it was looking to raise up to $79 million through the sale of 4.4 million shares at up to $18 each.

Then, the company scaled that back, saying Thursday it would try to sell only 3.8 million shares, at a lower price range, of up to $15 a piece.

Late Thursday evening Globoforce announced it had opted to postpone the IPO “until market conditions are more favorable.” Company executives declined to be interviewed Friday.

Indeed, the stock markets have been muted this year. The S&P 500 index is up 1 percent year to date, and the Boston-area’s one tech IPO this year, Care.com, is also up 1 percent from its IPO price of $17 in late January. On Friday the S&P 500 closed down 0.3 percent.

The outcome for Globoforce mostly stemmed from skepticism among investors about the company in particular, said Kathleen Smith, chairwoman of IPO research firm Renaissance Capital. Concerns included the highly competitive nature of Globoforce’s market and the firm’s reliance on one large customer, General Electric Co., which accounted for nearly a third of its revenues last year, Smith said.

A secondary issue is what Smith referred to as possible “cloud exhaustion” among investors for companies that based their business in the so-called cloud, which is a way to store applications and data in remote locations. Globoforce was one of four companies with cloud-related software seeking to go public this week, but the only one that did not launch.

Any time a company pulls an IPO, “questions are asked whether the market conditions are right for everybody — especially in a year like this where there are quite a few IPO candidates,” said Matt Wong, research and data analyst at CB Insights.

Initial public offerings of stock are a key barometer for the health of the technology and venture capital industries. While US biotechnology and health care companies have excelled in the initial public offering market during the past 12 months, with 76 offerings completed, the high-tech industry has had less activity with 48 IPOs.

This week, though, was to mark the start of a surge of tech IPO activity, with 11 companies lined up by the end of the month. Of the six scheduled this week, Globoforce was the only one that fell flat.

King Digital Entertainment, maker of the popular mobile device game Candy Crush Saga, is scheduled to go public next week, while other tech firms thought to be on the IPO runway include food delivery website Grubhub Seamless, online storage sites Box and Dropbox, and home goods e-commerce firm Wayfair, which is based in Boston.

Other possible Boston-area IPO candidates include health care software firm Imprivata and marketing software company HubSpot.