London Stock Market Faces Critical Test as Top Tech Firms Eye US Listings

A fresh wave of anxiety has swept through the City of London as major UK-founded technology firms prepare to launch their initial public offerings (IPOs) outside the capital, raising urgent questions about the future of Britain’s most important equity market.

Barney Hussey-Yeo, founder of Cleo, an artificial intelligence powered fintech that has grown to a valuation exceeding 1 billion dollars since its 2016 inception, has openly declared that the London Stock Exchange is currently unfit for leading technology businesses. Cleo, which generates all its revenues in the United States and plans to launch for UK customers next year, is now in discussions with Goldman Sachs and JP Morgan regarding a potential IPO. Yet, Hussey-Yeo asserts that the company is likely to follow in the footsteps of peers like Arm and Wise in seeking a US listing, specifically on Nasdaq.

Concerns stem from the fact that a succession of high profile companies including Wise and Revolut have either shifted their main listings to New York or indicated that the US market is their preferred option. Monzo, a homegrown online banking success, has deliberated whether to list stateside rather than leveraging its strong British presence. These moves are despite the government and the Financial Conduct Authority having enacted the most significant overhaul to the listing regime in decades, hoping to revitalise the domestic market.

Hussey-Yeo remains unconvinced by the reforms so far, highlighting persistent obstacles such as restrictive listing rules and the continued imposition of stamp duty on share transactions, which he argues suppresses liquidity and deters homegrown innovation. The Mansion House Accord, designed to encourage pension funds to channel more support to UK venture capital, has yet to demonstrate meaningful momentum.

London’s IPO pipeline remains thin, with just 12 debuts so far this year raising a combined 199 million pounds, the lowest since the turn of the millennium. Meanwhile, global markets such as New York and Zurich have hosted blockbuster listings with significantly larger valuations. The narrative could change in the months ahead if a raft of well received flotations materialise, but confidence among advisers remains tentative given recent geopolitical and financial shocks that have derailed progress during previous IPO windows.

There are glimmers of hope as companies like Beauty Tech and Shawbrook prepare to test investor appetite with potential London listings. Private equity backed heavyweights such as Visma and SumUp are also considering London amongst their options, though nothing is confirmed. Seasonal optimism is tempered by the need for further bold reforms to make the UK a competitive magnet for ambitious technology entrepreneurs, including targeted tax incentives and renewed commitments from pension funds to invest in British innovation.

Should these changes be delivered with sufficient urgency and scale, the London Stock Exchange could yet stake a claim as the venue of choice for the next generation of world beating fintech and technology companies. The decisions of Cleo and its contemporaries may prove pivotal for the City’s future direction.