Savova floated PensionBee on the London Stock Exchange in April last year. She says that for her – and many other UK technology leaders – the decision on where to list was simple: the US or the UK. “London is competing against the US, that’s the rival,” says Savova. “In conversations about where to IPO, UK firms rarely consider Frankfurt or other countries,” she says. “It’s always between the UK and US.”
This is because, for many UK-based firms, the size of the US market is a major draw. Mark Thurston floated Endava on the New York Stock Exchange in 2018. “I did wonder about listing in London,” he says. “The bar is lower, we would be a bigger fish in a smaller pool, and there’s no quarterly reporting and Sarbanes-Oxley to consider but the founder, John Cotterell, had his sights set firmly on the US as that’s where the major growth will come from.”
For Moonpig’s MacKinnon, however, the UK was a natural listing venue: it’s where the majority of Moonpig’s customers live, as well as the majority of employees who are based in the London Head Office. “While we have a sister brand in the Netherlands, which represents around a third of our business, we have always considered ourselves to be a British business with the consumer model being well understood here in the UK, so the FTSE was a natural place for us to be.”
“Since listing, we have seen an increase in profile as a London listed business,” he continues. “We used to get maybe two press articles a year and we would drive a small amount of consumer PR ourselves but now we can feature in dozens of articles a week. We also find that we receive good coverage by research analysts so in terms of profile, it has been a real positive.”
Every technology firm is different and has differing needs when it comes to IPO location. Thurston believes that, generally, those bringing a brand-new technology proposition to market will usually prefer the US. “The London Stock Exchange is like Jurassic Park,” he explains. “All dinosaurs and no new technology companies. Investors don’t really understand new tech in the UK. If you have a brand-new product or slant, it can be hard to get traction.”
However, the decision may not remain a binary one for much longer. Other stock exchanges are now vying for tomorrow’s tech and innovating to attract for listings. The Dubai exchanges recently saw huge gains, as has Singapore, Hong Kong and, in Europe, Amsterdam and Frankfurt. Of the 10 biggest tech IPOs in Europe last year, two listed in Frankfurt, two in Amsterdam and the balance on the LSE and Nasdaq.