Klarna IPO: Fintechs May Move Away from London
Summary of the City A.M. Article: London stock Exchange & Fintech Listings
This article from City A.M. discusses the potential for major fintech firms like Starling and Monzo to list on the London Stock exchange, and the challenges the LSE faces in attracting and retaining these companies. Here’s a breakdown of the key points:
Valuation & Potential Impact:
High Valuations: Starling Bank is eyeing a £10bn valuation, while Monzo is predicted to be around the same mark.Revolut is valued at $75bn.
FTSE 100 Entry: Listing in London could see both Starling and Monzo immediately enter the FTSE 100, boosting the LSE’s credibility.
Challenges for the London Stock exchange:
US Competition: There’s a risk these firms will choose to list in the US, following Klarna’s example.
Past Failures: Poor IPO performances from companies like CAB payments (down 83%) and Wise (dual listing with US as primary) serve as warning signs.
Stamp Duty: Revolut’s CEO argues that stamp duty on shares reduces market liquidity, making a London listing “not rational.” Several other fintechs have called for its removal.
Future Outlook:
Strong Pipeline: The UK still has a “strong pipeline” of late-stage fintech companies ready to list.
Regulatory Reform Needed: The article emphasizes the need for the UK to expedite reforms to capital markets regulation to improve confidence and attract fintechs. Not “Game Over”: Despite challenges, there’s still hope for the London markets if improvements are made.
In essence, the article paints a picture of a crucial moment for the London Stock Exchange. It has the potential to attract meaningful fintech listings, but faces strong competition from the US and needs to address concerns about its regulatory habitat and past performance to secure its future as a hub for fintech innovation.