Building on the momentum seen towards the end of last year, IPO activity in the capital is set to surge this year.
After a pause in the first half of the year as the pandemic took hold, activity started to re-emerge by the end of the summer before a significant uptick in the last quarter.
In the fourth quarter, London’s main market saw 17 listings raising £3.4bn, compared with three in the previous quarter which raised £3.3bn.
Activity also accelerated on the junior index AIM, which has long been considered an attractive option for newer companies, with 10 IPOs compared to three in the third quarter.
Competition for investment will likely intensify after the promising end to 2020 and a promising pipeline of listings.
“2021 promises to be an IPO bonanza… The UK currently has 136 potential unicorns and around 80 unicorns; more than any other country on the continent and as many as Germany, Netherlands and France combined,” Stephen Kelly, head of Tech Nation says.
Among those reportedly mulling a float are Checkout.com, Darktrace, Deliveroo and Transferwise. And with the Treasury releasing its review into listings rules to encourage UK tech companies to IPO in London there is scope for more.
“Now is the time to fasten our seat-belts at the start of a golden UK Tech decade,” Kelly says.
At the end of 2020 London maintained its position behind the US and China for funds raised. Remarkably more than 40 per cent of total capital raised by commercial companies in Europe in 2020 through IPOs was in London, according to EY’s IPO tracker.
“Looking to the year ahead, we can expect 2021 to be a very strong year for the UK IPO market,” says Scott McCubbin, EY UKI IPO leader. “An uptick in IPO activity may well intensify the competition for investment, placing greater emphasis on preparing early for IPO and raising profile with investors.”