London remains the top choice for an initial public offering (IPO) among British tech businesses which look to be eyeing up the public markets despite a muted period, according to new research.
In a survey of UK-based tech firms RSM UK found that just over three-quarters (76%) were considering listing publicly within the next five years.
Among the firms planning a public launch, 57% said their top destination would be in London, up from 53% the year prior.
In contrast, just 26% chose the US, sharply down from 47% last year and 35% said Europe, down from 42%.
This suggests that despite a slow few years for the London markets and a period of uncertainty for businesses, some confidence in the UK tech ecosystem has returned.
“There are clear signs of improving confidence among business leaders in UK tech, and we’re seeing this come through in their intentions to explore a UK listing,” said Ben Bilsland, partner and head of technology industry at RSM UK.
“This is particularly encouraging, as UK tech companies have typically looked towards a US market listing, due to the ability to access capital on a much larger scale.
“With significant instability around US government policy, it’s possible this has encouraged UK businesses to explore options closer to home instead.”
Bilsland also noted that the “sky high valuations of AI stocks” in the States may be “fuelling concerns of an AI bubble” and, therefore, an incoming “market correction”.
Separate research from RSM UK earlier this month found that 76% of British tech businesses felt confident their business will grow under the current administration.
“More tech businesses may also be leaning towards the UK stock market given its broader base of international companies and investors,” said Diane Craig, partner and head of capital markets at RSM UK.
“Recent regulatory changes that have streamlined the UK listing regime and made the UK a more cost-effective option could also be factors. Ultimately there are advantages to both the UK and US markets, and the most suitable option will vary depending on the business’s individual characteristics.”
Craig added that recent listings in London, including the RSM UK-advised Beauty Tech Group IPO, have helped boost the market’s appeal.
