Just 43 of the UK’s fastest-growing tech firms have floated on the London Stock Exchange in the last twenty years, according to new research.
New research by accountancy firm BDO shows that of the UK’s 1,200 fastest growing tech startups fewer than four per cent have listed in London.
Even with blockbuster IPOs lined up for this year including Deliveroo and Darktrace, it indicates the extent of the work needed to convince promising startups to list in London.
“If you believe that listing fast-growing tech companies on the stock market is an important part of helping to deliver economic growth, then the UK is missing out,” BDO’s of technology and media Tony Spillet said.
“UK investors are currently only able to access many tech businesses indirectly through private equity funds, a route which is not open to many.”
Investment in tech firms hit a record high last year as VC and private equity firms piled into companies that benefited from the pandemic. It means tech companies are staying private for longer and in some cases shunning the public markets entirely.
For others they are looking to the US Nasdaq index where the regulatory requirements are looser than in London, which prompted a review into the rules.
“For London to compete on the world stage and confirm its position as a globally competitive tech hub, we need to see more tech companies choosing to list in the UK,” Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates said.
The Lord Hill review, published last month, set out recommendations to encourage companies to list in London including the introduction of dual class share structures.
“The Lord Hill review is a roadmap for how we establish the London Stock Exchange as an attractive market for tech entrepreneurs and now is the time to ensure we have a robust and attractive public listing pathway for our tech community,” Shaw added.
While work needs to be done, Stephen Kelly, chair of Tech Nation, considers 2020 a turning point for London listings.
Eight UK tech companies have floated on the LSE last year, raising a total of £3.1bn, with 40 per cent of all capital raised falling within the tech sector.
We continue to expect homegrown IPOs to gather pace as we enter a ‘golden age’ for UK tech. With 80 unicorns, the UK now has the best pipeline for IPOs in Europe, more than Germany and France combined,” Kelly said.