Tech Firms Opting Against Listing on London Stock Market
In a move that reflects a growing trend, several European tech companies are opting for primary listings on the New York Stock Exchange (NYSE) over the London Stock Exchange (LSE). This shift is primarily driven by a more competitive innovation ecosystem, a larger tech-focused investor base, and deeper capital markets in the U.S., particularly on Nasdaq and the NYSE.
The U.S. capital markets offer a more vibrant and receptive environment for high-growth tech companies. Europe, including the UK, is perceived as lagging in building a competitive innovation ecosystem that can fully support these scaling tech firms. U.S. exchanges, especially Nasdaq, attract a significant number of technology-focused investors who better understand the valuation and growth trajectories of tech businesses. This enables companies to raise more capital and achieve higher valuations.
A listing in New York carries global prestige and visibility, which can help tech companies boost their brand recognition and facilitate international expansion, especially into the U.S. market, which is one of the largest consumer bases globally. Successful moves by high-profile companies like Spotify (which moved its listing to Nasdaq in 2018) and Arm Holdings (which listed on Nasdaq in 2023) have set examples that other European tech companies are following. Klarna is also seriously considering a U.S. listing as part of its IPO plans.
British fintech Wise is shifting its primary listing from the London Stock Exchange to the New York Stock Exchange. This move has raised concerns from some quarters, including Sean Reddington, co-founder of UK tech firm Thrive. Reddington fears this move may deepen problems, including a potential 'brain drain' of capital and talent. He stated that the diminished reward of a domestic IPO may push more companies to consider relocating or listing overseas.
The trend of European tech firms choosing the U.S. for their primary public market debut is being referred to as a "going west" movement. This reflects a broader shift where these companies are benefiting from a more favorable funding and innovation ecosystem, rather than London or other European exchanges that struggle to keep pace.
While no direct details on regulatory or specific cost comparisons were mentioned in the latest data, the emphasis remains on ecosystem competitiveness, investor quality, and market depth as key drivers for this shift. European investors often want to see revenue from day one, which may restrict the growth of startups.
The conference on Europe's startup struggles, taking place on June 19-20 in Amsterdam, will be a hot topic. Tickets for the conference are currently on sale, with a discount code available (our websiteXMEDIA2025 for 30% off).
References:
- TechCrunch
- Financial Times
- The Guardian
- CNBC
- Reuters
- The shift of European tech companies moving for primary listings on the New York Stock Exchange is seen as an opportunity to secure funding and visibility in the competitive technology sector, highlighting a need for Europe to catch up in building a vibrant innovation ecosystem.
- The prospect of higher valuations, global prestige, and easier access to tech-focused investors on U.S. exchanges like Nasdaq and the NYSE have led to the emergence of a "going west" movement, suggesting that European lifestyle and finance may need to adapt to remain competitive in the tech industry.
