Just this week, Swedish buy-now-pay-later startup Klarna announced it was going to IPO on the New York Stock Exchange.
Whilst the decision to go public in The US wasn’t surprising, it is part of a wider trend we are seeing, where European startups are listing in the US.
Barney Hussey-Yeo, founder of Cleo, recently shared with TechRound that a casual conversation with a top investment banker revealed just how much London is being put aside.
Talking to TechRound, he said: “For many on Wall Street, the idea of a UK tech champion choosing the London Stock Exchange is almost unthinkable. That should worry us all.”
IPOs In London Hit 30 Year Lows
According to Global Finance Magazine, London’s once mighty market is taking a tumble, with the first half of 2025 dropping to a 30 year low.
To put this into perspective, this is a 98% fall from the 2021 peak and even lower than 2008, after the financial crisis.
But the strange thing about the situation is that innovation in London is still thriving! The UK has produced many unicorns and continues to have a political environment that backs business growth.
The problem? London seems to be losing its appeal on the global economic stage.
Why Is The US Winning The Listings War?
So what is it about the US that is so much more appealing than the UK?
Well, for starters, the S&P500 and NASDAQ trade at higher valuations, meaning startups can attract more investors and capital.
The US is also a bigger country, so listing on their stock exchange means easier access to a bigger pool of investors, which is incredibly valuable for awareness and capital growth.
But ultimately, the US is a country that champions innovation, with many thinking that their policies around listed companies make them more geared towards fast growth.
But to really answer the question ‘is the London stock exchange losing its appeal for startups, we asked the experts…
Our Experts
- Jaco Vermeulen, CTO at BML
- Martin Hartley, Group CCO of emagine
- George Sweeney, DipFA, Investing Expert at Finder
- Deepak Shukla, CEO of Pearl Lemon Invest
- Leonid Kil, CBDO & Co-founder at Diagram Capital
- Nik Colbridge, Corporate Partner at Dentons
- Meera Shah, Head of M&A at Buzzacott
- Leo Labeis, CEO of REGnosys
- Tobias Robinson, Chief Analyst at Investing.co.uk
- Simon Ellis, Head of Operations, EMEA, at Airwallex
For any questions, comments or features, please contact us directly.
Jaco Vermeulen, CTO at BML
£The brutal truth is that it is all about cashing in on share valuations. NYSE and NASDAQ sell shares on stories, “charismatic” leaders and speculative, valuations not actual business, stability and profit. So, you get valuations bizarrely disconnected from actual performance – and for tech businesses, this can be a short term benefit.
“The LSE is more rigorous to list and is viewed for long term growth, not a quick flip on speculative thinking and heavy marketing. Overall, Europe and UK is seen as objective, but (frankly) boring, so it is a significant cultural difference. The same applies to investors in these markets…hence why we have so much lower, and more conservative VC activity. There are some alternatives developing – Dubai is positioning to be the alternative to the US markets, for example…”
Martin Hartley, Group CCO of emagine
“The UK market still remains attractive in many ways, with strong private equity and VC support, and London is still seen as a major tech hub. However, the key driver behind companies choosing the US over the UK for public listings is valuation. US markets simply offer larger valuations, which can be hard to ignore for companies looking to maximise returns.
“Although companies may opt for US listings, this doesn’t signal a decline in strength or potential of the UK or European tech ecosystem. The UK has strong talent pools and a strong investment environment. However, certain tax challenges may contribute to talent migration over time.”
George Sweeney, DipFA, Investing Expert at Finder
“Unfortunately, the London Stock Exchange (LSE) isn’t losing its appeal, it’s already lost it. In recent years not only have we seen exciting UK technology stocks like Arm (ARM) shun the UK for US-based stock exchanges like the Nasdaq, but we’re also seeing existing companies listed on the LSE (like Wise) are upping sticks and moving elsewhere too.”
“To make matters worse, future prospective listings such as Klarna, Bitpanda, and Shein are all choosing the US, Europe or Hong Kong over the UK. So, when it comes to past, present, and future stock market listings – the LSE is not only failing to attract new companies, it’s hemorrhaging existing firms that are looking at better alternatives.”
For any questions, comments or features, please contact us directly.
Deepak Shukla, CEO of Pearl Lemon Invest
“The London Stock Exchange has recently faced stiff competition from other markets that have taken on a heavy technology bias, specifically the Nasdaq. Nevertheless, the LSE has its own unique offerings – stability, access to different investment areas, and a well-established regulatory framework. This creates an appeal to investors wanting long-term growth. For tech companies and high-growth companies, markets, including the US or Asia, could feel more appealing due to better growth opportunities and a more dynamic investment environment.
“One significant challenge for the LSE will be how to address these transitions. More and more tech companies are looking for flexible regulations listing, and the LSE needs to find a way to continue to appeal to younger tech-focused investors or high-growth companies, considering whether they should take the LSE as an option.”
Leonid Kil, CBDO & Co-Founder at Diagram Capital
“In recent years, the London Stock Exchange has clearly lost ground. High-profile moves such as Flutter’s switch to New York and TUI’s relocation to Frankfurt underline a perception that London no longer offers the same liquidity or valuations as rival markets. Delistings are outpacing new listings, and even UK-born champions like Revolut are openly considering the U.S.
“That said, I don’t believe London is “finished.” The FCA’s major reform package – simplifying listing segments, easing rules for dual-class shares, and reducing red tape – is a meaningful step toward making the market more founder-friendly.
“Raspberry Pi’s positive IPO in 2024 showed that with the right conditions, London can still attract strong demand.
“The real challenge lies deeper: the stamp duty on share purchases, the limited appetite of UK pension funds for equities, and persistent valuation discounts. Unless these structural issues are addressed, global firms will continue to look abroad for capital.
“In my view, London is not losing its appeal permanently – it is in transition. If the regulatory changes are matched by bolder tax and investment reforms, the City still has every chance to regain its role as a competitive home for growth companies.”
Nik Colbridge, Corporate Partner at Dentons
“When choosing where to list, most IPO candidates will look at which index will deliver the highest valuation and, for those awaiting expiry of a lock-up to fully exit, the most liquidity.
“While London embarked on listing rule reforms to make its indexes more attractive to potential issuers, the complexity of executing the IPO is generally a secondary consideration.
“Most issuers will compare venues based on predicted trade multiples, rather than hoops they must jump through to float.
“For mature exchanges like London, this poses a difficult question about how to encourage more active fund participation in a capital markets system dominated by passive pension funds.”
For any questions, comments or features, please contact us directly.
Meera Shah, Head of M&A at Buzzacott
“There has been plenty of discussion in the advisory community this year about the appeal of scaling up businesses in the UK, and the potential investment opportunities that arise when businesses look to either list or raise substantial sums of capital beyond £75-100m.
“We specialise in advising clients in the private markets, and from that lens, we note that there have been several positive indications of further capital flowing into the UK, through establishments such as The British Business Bank. However, we have also noticed that our global clients headquartered in the UK are increasingly looking to the rest of Europe and the US when thinking about their future home, and note that those anticipating an LSE listing are still debating whether other jurisdictions have greater appeal. The appeal of particularly the US appears to be due to a greater availability of capital, larger cheque sizes and a wider market.
“The FinTech industry is a good reflection of the state of the attraction of the LSE to companies, with Monzo still debating between London and the US, and Wise’s indications of switching to listing with the NYSE, while also aiming to become a UK bank – to me this highlights that despite some concerns, the UK still holds some attraction as a base. It will also be interesting to see the announcements coming from the Autumn Budget later this year, and how supportive any changes will be for businesses looking to stay in or move to or list in the UK.”
Leo Labeis, CEO of REGnosys
“While London faces increased competition from New York and other global financial centres, it is too early to conclude that it is losing its appeal, given its resilience to bounce back.
“London remains Europe’s deepest capital market and continues to attract top talent post-Brexit, offering unrivalled access to global investors, a strong regulatory environment, and a thriving fintech and tech ecosystem.
“If the UK continues to advance reforms on listing rules, promoting innovation, and focusing on high-growth sectors, such as RegTech London will remain a premier destination for start-ups and fintechs looking to IPO.”
Tobias Robinson, Chief Analyst at Investing.co.uk
“Nice to meet you. I’m the chief analyst at Investing.co.uk. Here are my views on the LSE’s bleak future…
“It’s not looking good for the London Stock Exchange, not good at all. In the first half of 2025, just nine companies floated in London, raising £182.8 million; this marked a 30-year low in IPO proceeds for that period. That’s also down sharply from £513.8 million in the same period of 2024.
“If you look at the broader trend we see a similar story: 42 IPOs in 2022, 20 in 2023, and just 16 in 2024. Fewer firms are seeing London as their launch pad.
“The gap is most obvious in high-growth sectors. Technology and fintech firms, which have driven stock market excitement elsewhere, are pretty much absent from the LSE these days. Big names like Wise and Revolut have preferred the United States, where valuations are stronger and investor appetite is deeper.
“For a founder chasing growth and an initial high-value listing, those factors can outweigh London’s long history (not everyone is that nostalgic).
“We’re seeing firms often point to three big barriers: high listing costs, layers of regulation, and weaker valuations compared to New York. Revolut’s founder even said London lacked the liquidity to make a float worthwhile.
“The LSE is trying to adapt of course, with initiatives like the Pisces platform aimed at improving liquidity in private markets. It could help attract high-growth start-ups, but to be honest, in my view, more drastic reforms are needed if London wants to compete head-to-head with U.S. markets.”
Simon Ellis, Head of Operations, EMEA, at Airwallex
“The London Stock Exchange is in a tough spot, and it’s difficult to see it regaining appeal unless important changes are made. In recent times, challenges facing the LSE have stemmed from sluggish economic growth and competition from more liquid overseas markets, such as the US. In fact, the brain drain to the US is undeniable, as companies are increasingly attracted to NASDAQ’s high-profile tech success stories and Silicon Valley’s venture capital ecosystem, which offers a proven path from startup to global player.
“To start reinvigorating the LSE, the UK must foster an environment that drives innovation by improving capital access and providing growth tools for businesses to succeed globally. This includes supporting entrepreneurs through financial and operational challenges while scaling what could be the next UK-listed success story. A coordinated effort between government, business and tech sectors is needed to unlock growth and attract more tech listings to London.”
For any questions, comments or features, please contact us directly.
