LSE gunning for first tech IPO on new platform

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AS LONDON gears up for the first floats on the new High Growth Segment, experts in fast-growing firms have said that a handful of extra analysts and investors could enable the platform to rival the Nasdaq for technology listings.

A growing number of tech companies are being courted by the HGS, which was launched by the London Stock Exchange (LSE) in March with the goal of enticing British firms into the market without the usual free-float rules.

“There’s no doubt that it’s generating a lot of interest,” said Tudor Aw, head of technology at KPMG Europe. “What we don’t have is fund managers and analysts that focus on tech, but when you see [firms] like Facebook and LinkedIn making money, that will come.”

Marcus Stuttard, head of UK primary markets for the LSE, said the HGS “is being positively received by fast growing companies”, alongside rising interest in the broader IPO market.

Mimecast, a software group considering a float once it exhausts last year’s $62m funding round, said the LSE and the government have stressed their support for the firm going public here.

“We are seeing a real interest from the UK about keeping as much of the capital activity around the company here in the UK, while they are understanding about firms that jump on planes and relocate temporarily,” said US-based chief executive Peter Bauer.

Bauer said the concentration of analysts in the States is a draw, but added: “We are not talking about thousands of new people being employed to do this. In the UK, ten more could really make a difference if they really focused on it.”

Index Ventures, which backs high-growth firms including Mimecast, is similarly upbeat. Partner Robin Klein called the HGS “a real and viable alternative to the Nasdaq”. “I wouldn’t be surprised if there’s some floats taking place in the next year or so…. London is a sophisticated market and we certainly don’t want them losing out in the most attractive sector for growth.”