Inside Track: Let’s not overstate London’s appeal for tech flotations

David Hellier
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There’s nothing wrong at all with recently-floated technology companies like Macromac, Netscientific or Centralnic. These three groups, plus 18 others, have all floated on the London stock market over the course of the year and form part of the backdrop to a generally improving climate for flotations and fund-raisings in this city.

But they do not as yet provide proof that we have found the answer to London’s problem in holding on to the larger technology companies when it comes to them choosing to join the public markets.

It is poor timing, to say the least, that the government has chosen to launch its Future Fifty scheme, designed to push the UK into the front of the global race to attract and support online entrepreneurs, when one of the most exciting companies of its kind, King, maker of Candy Crush Saga, has decided to float in New York instead.

Already King’s UK-based financial public relations company, Powerscourt, which worked effectively and tirelessly on the account for a couple of years in the company’s high growth period, has been dispensed with for another that has a large New York office. Other ancillary jobs will go the same way.

And it is downright crazy for Tech City chief Joanna Shields, to claim, as she did in yesterday’s City A.M. that London has reached parity with New York when it comes to opportunities for companies to float.

Shields would be better served by taking a leaf out of the England football management’s book; start with low and realistic expectations and then either the disappointments will be more easily received or there will be a sense of absolute triumph if the unlikely happens and we retain some of the Kings of the future in the UK. The London Stock Exchange and others are working on changes to the listings regime that will surely help to encourage the likes of Zoopla, Just-eat and Mind Candy to remain in London when their turn comes to raise public funds. They will find more flexibility on free floats and other hindrances.

By the sound of things, New York is waking up to the fact that London is on the case.

Mayor Bloomberg recently said at a seminar held to debate the hi-technology sector: “Our competition is only going to be in other cities that have similar kinds of characteristics. And the city that comes to mind is London.”

But let’s not get carried away. The majority of the big tech floats like Twitter are likely to remain in New York, which has access to a massive investor base, for some time to come.