British Fintech Wise said this week that he would change his main list from London to New York, joining a growing list of companies by disregarding the London Stock Exchange.
The United Kingdom’s chip designer’s arm opted for an IPO in New York in 2023, while the food delivery giant only eats food to carry for the LSE for Amsterdam in November.
Klarna de Sweden has confirmed the plans to make public in New York, after the steps of the Spotify technology partner, based in Stockholm, which appears in the NYSE in 2018.
The raffle? Greater valuations, deeper capital and more appetite for risk.
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“The American economy continues to function much better than the EU, and the valuations are simply higher for companies that can list there,” Victor Enough, managing partner of Artis Partners told TNW.
The numbers support it. The NYSE has a market capitalization of around $ 27 billion, compared to only $ 3.5 billion for the LSE.
That scale, and the pocket investors that attract, pushed the arm to the arms list through the pond. Wise followed for the same reason, according to the CEO Kristo Käärmann.
Käärmann said the measure would take advantage of “the world’s biggest market opportunity for our products today and allow better access to the world’s deepest and liquid capital market.”
Beyond the great growth potential, US investors are also known for taking greater bets in technology companies in the growth stage.
“American investors understand the entire ‘income strategy before profit,” Andrey Korchak, a series businessman based in the United Kingdom, told TNW. “Meanwhile, in Europe, they often want to see income from day one.”
That risk aversion, Korchak believes, restricts the growth of new companies.
“Europe simply does not have the same density as technological unicorns,” he said. “And when the startups here reach that mark of one billion dollars, most still prefer to list in the US.”
Sean Reddington, co -founder of the technological firm of the United Kingdom Thrive, fears that the New York Wise list will deepen the problems.
“Wise’s movement to the United States indicates a worrying trend,” he said. “Threat a ‘brain leak’ of capital and talent, which makes it difficult for VC to invest in the United Kingdom scales without a clear output plan of the United States.”
He requested urgent government action, including providing “significant incentives” so that technology companies are listed in the United Kingdom.
“If the final reward of a domestic opi is diminished, it pushes more companies to consider relocating or listing abroad,” he said.
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