8 Upcoming UK IPOs You Won’t Want to Miss in 2021

The IPO market has changed significantly over the past two decades. Whilst IPOs have typically been the go-to for high-growth companies needing to raise large sums of money, the influx of capital into the private market in recent years has meant businesses needn’t go public so soon. Although there’s a lack of liquidity in private markets, there are several benefits of being a private company, including facing fewer regulations than publicly-listed companies, and being accountable to fewer shareholders. 

Looking specifically at tech IPOs, BDO research shows that less than 4% of the UK’s fastest-growing tech companies have IPO’d on the London Stock Exchange (LSE) over the past 20 years, instead opting for foreign markets such as NYSE or Nasdaq. It emphasises why proposed listing reforms, as set out in Lord Hill’s UK Listing Review, are desperately needed to allow more people access to these innovative businesses.

Alternative exit routes

The majority of high-growth UK exits are made up of acquisitions rather than IPOs. Acquisitions of ambitious UK companies have also seen much higher and steadier growth over the past decade, despite still dropping off slightly in 2020. But even for businesses set on going public, many have opted for alternative exit routes which are typically quicker and less regulated, as IPOs can take several years to complete. 

One such alternative is a ‘direct listing’ which involves selling existing shares to the public instead of issuing new ones. Notable examples include Metro Bank which chose a direct listing on the London Stock Exchange Main Market in 2016, as well as Spotify (2018) and Slack (2019) which did so on the New York Stock Exchange. 

Another increasingly popular option is SPACs (Special Purpose Acquisition Companies), shell companies set up for the sole purpose of raising money, listing on a stock exchange, and acquiring private businesses through a reverse takeover. EMMAC, a medical cannabis and CBD wellness brand, announced its intent to go public via a SPAC last year, whilst electric vehicle startup Arrival is also expected to complete its merger soon with the SPAC CIIG. 

Despite this shift away from IPOs, however, some UK businesses are still opting for the traditional approach to going public. E-commerce giant The Hut Group, for instance, raised a massive £920m from their IPO last year, having listed on the London Stock Exchange in September. Plus, we’ve already seen four IPOs by high-growth UK companies this year: first from battery, lighting, and vaping wholesaler Supreme in January, then Immunocore in February which saw it raise £189m ($258m), followed by Virgin Wines and AMTE Power so far this month. 

Which companies are most likely to IPO? 

Using the Beauhurst platform, we’ve previously looked at the average stats of companies that IPO, to determine the type of businesses most likely to do so in the future. We’ve now updated the figures, to include all 150 IPOs completed by high-growth UK companies since 2011. And since there’s a large amount of variation in the sample, we’ve also identified the median values for these stats. 

Prior to an IPO, the average high-growth UK company is 16 years old, has between 100 and 249 employees, and is valued at £118m. It has secured roughly £57m in fundraisings, across four rounds, the most recent of which was worth £24.2m. Whereas, the median high-growth UK company is 11 years old, has between 100 and 249 employees, and is valued at £27.7m. It has secured £10.2m in fundraisings, across three rounds, the most recent of which was worth £3.2m. 

The youngest high-growth UK company to IPO was just 10 months old (Immotion Group), whilst the oldest had been around for 224 years before listing (Watkin Jones Group). Meanwhile, the employee count of these businesses has ranged from just 5-9 employees to more than 1000, and amount raised from as little as £28k to as much as £986m, whilst pre-IPO valuations have been between £213k and £2.37b (The Hut Group).