2021 UK tech IPOs one year on: Slashed valuations, insolvency and profit woes

UK tech IPOs 2021 Image credit: Tony Baggett / Shutterstock

In 2021, UK tech public listings raised a record £6.6bn, more than double that of 2020. Big-name British tech companies including Deliveroo, Wise, and Darktrace painted an optimistic picture for the future of tech initial public offerings (IPOs) on the London Stock Exchange. One year on, amid a global economic downturn and looming recession, the fortunes of these companies and UK public markets are less rosy.

Last year, 37 tech and consumer internet companies went public in the UK, compared to just eight in 2020. Many of these companies have become household names. However, looking at these companies one year on paints a bleak picture. Many have struggled with profitability, one has gone bust and most have seen their market capitalisation plummet.

Here’s how some of the notable tech companies have fared since their 2021 IPOs.


IPO value: £7.6bn

Value today: £1.42bn*

Change: -81%

The app-based food delivery service grew to prominence in the 2010s and its revenues soared during the pandemic as consumers were forced to stay at home. Deliveroo capitalised on this success with an IPO in March 2021 at a monster valuation of £7.6bn, despite never posting an annual profit.

Deliveroo’s IPO was, to put it frankly, a bit of a mess. It was dubbed “the worst IPO in London’s history” after the value of its shares plummeted just a day after it went public, wiping £2bn from its initial market cap. Analysts pointed to Deliveroo’s dual-class share structure, which gave outsized voting rights to founder and CEO Will Shu, as a key factor for the poor IPO.

In the following months, Deliveroo recovered some value. That recovery, however, didn’t last long, as the share prices started to fall once again towards the end of 2021. Like other food delivery companies, Deliveroo has struggled with thin margins. This, combined with increased competition and legal challenges, has made Deliveroo an unsavoury option for many investors.

Amid the cost-of-living crisis and soaring inflation where cutting takeaways is an easy money saver for consumers, Deliveroo faces a challenging 2023.


IPO value: £775m

Value today: Administration

Change: -100%

The online furniture and homeware retailer enjoyed strong growth during the pandemic. Made.com’s lockdown-fuelled success culminated in an IPO in June 2021, with an initial market cap of £775m.

The breakout success of Made was not long-lived, however, with the company entering administration in November this year. Analysts have said its business model was flawed, with its reliance on more than 200 factories resulting in orders being deprioritised during global supply chain disruption. It then turned to stocking warehouses with its inventory, instead of the lean made-to-order model on which it was founded.

The brand and intellectual property of Made.com were snapped up for £3.4m by clothing brand Next last month.


Direct listing value: £8bn

Value today: £5.65bn

Change: -29%

Founded in 2011, Wise – formerly TransferWise – really started to pick up momentum in the late 2010s. The international money transfer service is one of the firms that symbolises the rise of British fintech. After a period of rapid growth, the company went public via a direct listing – a rare method of going public in which a company sells shares straight to the public – in July 2021 with a valuation of £8bn.

Shares in Wise began to dip towards the end of 2021 and reached their lowest value to date in July of this year. Shares have since recovered slightly, but the firm’s current valuation is still a far cry from its public debut.

Analysts have suggested that Wise stocks fell due to “excessive long-term growth expectations”. However, Wise has managed to maintain solid revenues and while profitability remains just out of reach, recent financial results show that the business is profitable before tax.

The company and its leadership have also had their share of legal troubles. Wise co-founder Kristo Käärmann has on multiple occasions faced HMRC over allegations of defaulted tax payments. Overseas in the United Arab Emirates, a subsidiary of the company, called Wise Nuqud was fined more than £300,000 for breaching anti-money laundering regulation requirements.


IPO value: £1.1bn

Value today: £398m

Change: -64%

It has been a long-stated ambition of the government to attract more overseas companies to go public in the UK. Consequently, Danish online review site Trustpilot’s decision to list in London was seen as a major coup for the capital’s public markets. Despite a number of criticisms over fake reviews plaguing the website, the company’s March 2021 IPO got off to a good start, with shares rising as much as 16% on the first day of trading.

However, the current value of the review site is less than half of what it was at the time of its IPO. A drop-off in revenue and a disappointing expansion into the US market have been cited as possible reasons for the sharp fall in its stock price.


IPO: £1.7bn

Today: £1.9bn

Change: +12%

Something of an outlier for 2021 tech IPOs, cybersecurity firm Darktrace has the unique honour of being worth more than it was at the time of its IPO. It is a respectable achievement, particularly when compared to the rest of the 2021 UK tech IPO cohort – though things have not been perfect.

Cambridge-based Darktrace has demonstrated it is capable of turning profits in the past, though previous profitable quarters have come with razor-thin margins. The share price of Darktrace this year has been fairly volatile, with a couple of dips, particularly after a rumoured acquisition from the US private equity firm Thoma Bravo was called off.

Why are 2021 UK tech IPOs struggling?

The obvious reason for the poor performance of 2021 UK tech IPOs is the challenging macroeconomic situation. Public and private markets have been battered all over the world. Facebook parent company Meta, for example, has seen its share price plummet by 64% since the start of the year. Similarly, Amazon, Google and Netflix have all lost billions in value.

“A large factor in the inability of recently listed tech IPOs to retain listed valuations has its roots in the adjusted outlooks and market sentiment towards technology over the intervening period,” said Gerry Hennigan, business support & IT services analyst at stockbroking firm Goodbody.

Hennigan told UKTN that post-covid, growth expectations towards technology “sharply re-adjusted leading to lower valuations”. He added that the “elevated expectations” led to “more severe valuation declines for some”.

Looking back at the cited examples, missed growth targets are a consistent factor in the downturn of these companies. While that principle can often be applied to depreciated stocks, London’s graduating class of 2021 appears to (almost) entirely have set unreasonably high expectations that could not be met.

Another important factor is rising interest rates. A decade of historically low rates created a funding bonanza for tech startups. The promise of high returns on risky venture capital tech investments inflated the valuations of many startups. This meant those that entered the public market at its peak faced a different reality from when they were judged solely by the private markets.

Patrick Kavanagh, the co-founder of Atlantic Money, points to an increased focus on profitability from investors over this year.

“The era of subsidising blitzscaling and unsustainable growth seems to be in the rear-view mirror for now,” says Kavanagh. “Tech firms are now quite literally paying for their previous stratospheric valuations, rapid expansions, and loss of focus. They’ve been forced to tighten their belts, and many have withdrawn job offers and laid off staff.”

Combined with rising interest rates, inflation and the bleak economic outlook in the UK, it shouldn’t come as too much of a surprise that many UK tech IPOs have performed poorly since 2021.

What’s next for UK tech IPOs?

IPO activity has been subdued this year not just in the UK but globally. According to consulting firm EY, there were 44% fewer IPOs globally from the start of 2022 up until the end of the third quarter. In the third quarter of 2022, there were just eight IPOs across all sectors in the UK compared to 33 during the same period in 2021.

Tackling inflation and bringing about economic stability will undoubtedly be key to creating a more reliable market and encouraging more tech listings. Several tech companies, including Atom Bank, have delayed IPO plans.

Putting a timeline on when things will turn around is tricky, though.

“I personally think it unlikely that the UK IPO market will pick up in the short term, meaning that 2023 is likely to be a quiet year,” says Tania Wilson, research director at analyst firm TechMarketView.

Wilson says that she expects private owners to “sit tight for a while” as they await more stability in the stock market. She also predicts that markets in other territories such as the NASDAQ will experience recovery sooner than London.

This means that British tech companies looking to IPO “might actually turn elsewhere to do so” as the “dismal economic climate in the UK” is “bad news for the ambition to set London up as a thriving tech IPO destination”.

*All public valuations are accurate as of 22/12/12