London has started to challenge the US exchanges following some major tech IPOs in 2015.
‘Executing a successful IPO: Markets for technology‘, a report by PwC found that last year was a particularly strong one for the UK, which saw two of the five $1bn+ tech IPOs, including that of Worldpay.
Additionally, the report says that between 2011 and 2015, there were 22 tech IPOs raised in London, worth a total $10.8bn. The average IPO proceeds, it says, stood at $492m.
Brian Henderson, partner fast growing companies leader at PwC, spoke about when UK tech companies should consider going public:
“Whilst some of today’s entrepreneurial companies have aspirations to IPO, others are staying private for longer, or have even discounted listing altogether. This is particularly apparent in the UK fast growth space where venture capital has been available for the right businesses and valuations have been increasing.”
He added: “In addition, UK fast-growing tech companies can now take advantage of differnt sources of private capital such as peer-to-peer lending and crowdfunding and even the banks are lending more to such businesses than they used to because they see their growth potential and the banks’ attitudes to risk appear to have softened.”
Staying private
The report adds, that although public capital raising can drive a step-change in a company’s growth, technology companies are also able to make considerable progresses without resorting to public markets.
“Operating without public investor scrutiny can be very beneficial, allowing for the creativity, experimentation – and at times failure – necessary to establish a genuinely sustainable business model,” it says.
Once the right elements are in place, the report adds that public markets can provide the scale of capital required to spur growth and consolidate a market position.