Tech IPOs raised a record £6.6 billion in 2021, double 2020 figures

Following a year of bumper public debuts by tech companies, analysis shows that tech IPOs in the UK raised £6.6 billion, more than double 2020’s figures of £3.1 billion, according to data from the London Stock Exchange (LSE). With 126 companies listing in the UK in 2021, tech companies made up 29 per cent of listings on the LSE, indicating the UK tech industry’s increasing maturity and driving much of the London market’s success.

The analysis was revealed as Digital Minister Chris Philp and Economic Secretary to the Treasury John Glen spoke with founders and leaders from leading high-growth tech companies at  No 10 Downing Street, including Quantexa, Bought by Many, Oxford Nanopore and OakNorth. https://www.oaknorth.co.uk

Tech leading the way

Landmark IPOs of UK-headquartered businesses in 2021 included Deliveroo, Moonpig and Trustpilot. The 37 tech IPOs compare with just eight in 2020. London also proved its international competitiveness by attracting companies from Denmark (Trustpilot), Canada (AlphawaveIP) and the US (Devolver Digital)

Fintech has been a leading area of UK tech over the past five years, with the country home to almost 4,000 fintech companies according to Dealroom, which have disrupted traditional financial services. It follows then that this would be one of the dominant categories of tech companies making public debuts in 2021, with a total of seven fintech companies listing including LendInvest, PensionBee and Wise.

Ecommerce companies were another dominant category, illustrating the increasing trend towards online shopping which accelerated sharply during the pandemic. A total of 10 ecommerce companies listed in London in 2021. This included consumer commerce companies such as Moonpig, Made.com and InTheStyle, as well as B2B companies including CMOstores.com which serves construction businesses.

Growth in appetite to list

The publication of Lord Hill’s UK Listings Review in March 2021 was a turning point in encouraging innovative and tech-led companies to choose London. It demonstrated the UK Government wants the UK Capital Markets to be the global destination for innovative companies to fund themselves. Proposals to reform dual class share structures, free float requirements and other elements of importance to founder-led businesses were picked up and taken forward by government and the Financial Conduct Authority at pace, followed by a surge in tech listings seen last year.

The listing rule reforms also saw the evolution of the UK’s SPAC (special purpose acquisition company) regime to better meet the needs of those seeking capital, with investment firm Hambro Perks announcing in November that it was launching London’s first SPAC under the new rules.

Following the success of the UK’s tech sector in recent years, 2022 now has the potential to be another record-breaking year, with the maturity of the UK tech sector indicating a strong pipeline of companies ready to come to market. According to the latest data by Dealroom, the UK is now home to 116 unicorns - tech companies that are worth $1 billion or more in value - and 213 futurecorns - high growth tech companies that are predicted to reach the coveted $1 billion mark in the future, indicating a strong pipeline of listings to come.

Digital Minister Chris Philp said: "2021 was a brilliant year for UK tech and it’s great to see just how many companies have grown from startup to scale-up, to finally becoming publicly-listed businesses on the London markets.

"Global investors hold London’s capital markets in high esteem and as we implement clear governance around innovative fast-growth companies, including rules around AI and data, we believe even more companies will appreciate the advantages that listing in London can give them.”

Julia Hoggett, CEO of London Stock Exchange plc, said: "The UK is home to entrepreneurs, innovators and disruptors across a range of sectors, with some particularly remarkable success stories for companies in the technology sector. Last year demonstrated that the London Stock Exchange is increasingly becoming one of the top destinations for these companies and their founders to finance their visions and thrive. We now have an opportunity to build on this momentum, supported by the ambitions of the UK Government, and for the UK Capital Markets to play a leading role driving growth in the global tech sector and supporting the UK economy for many years to come."