Upcoming IPOs in the UK | 2023

Farzana Haque, 26 January 2023

Last year’s volatile market conditions—resulting from the invasion of Ukraine and the reverberations of the pandemic—have had an undeniable impact on the IPO market in the UK. But how different will the 2023 IPO market look compared to previous years? We explored the latest data within the UK’s high-growth space and have taken a look at which companies are likely to go public in 2023.

What is an IPO?

IPOs are not the only exit route available for private companies, alternative exits include acquisitions and direct listings.

In fact, the majority of high-growth UK exits are made up of acquisitions rather than IPOs. An increasingly popular option within this method is special purpose acquisition companies (SPACs). These are shell companies created with the sole intention of raising money to acquire companies. In 2022, we saw almost half of all US listings made by SPACs, a trend that we could soon see in the UK.

Another exit route we see is ‘direct listings’. This is when companies do not create new issues of shares but rather sell existing shares to the public. We saw this in 2018 when Spotify chose a direct listing on the New York Stock Exchange (NYSE) and in 2021 with Wise.

Why do companies IPO?

IPOs are often the end game for startup and scaleup companies. Exiting the private market allows the founders and investors to cash out from the company, fully realising gains from the initial investment.

An IPO is not just an exit event, it is also the beginning of another company life cycle: one of growth. While remaining in the private market does offer benefits such as fewer regulations, exit events also offer significant opportunities. By selling shares to the public, companies can generate big capital more cheaply and easily than through equity fundraisings or a loan. In doing so, companies can grow much faster, enabling them to expand into new markets and develop new products.

Going public has the added benefit of publicity, which companies can use to further establish themselves. Publicity can also potentially help secure better terms from lenders in the future. Another benefit of an IPO is a potential increase in flexibility regarding strategy, as was the case with the Porsche IPO of late last year. Oliver Blume, CEO of the VW group and Porsche, has said that the IPO increased the degree of autonomy for Porsche, placing them in a great position to implement ambitious goals in the coming years.

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Trends in the UK IPO market

IPO activity peaked in 2021, with 54 IPOs occurring across the year and a total of £3.37b raised. The highest average raised from IPOs was in 2016, which saw 21 IPOs completed, with an average of £116m raised. In contrast, just 10 IPOs were completed in 2022, falling 81.5% from the previous year.

The biggest IPO of 2022 was that of Clean Power Hydrogen which floated on the Alternative Investment Market (AIM) for a share price of 45p. The IPO price of this UK cleantech company was £30.0m.

There could be numerous reasons for the decline in the number of IPOs—high interest rates, talent shortages and global economic volatility. The plummeting of share prices across the board, particularly of big tech companies, also does not create confidence that the climate is right for an exit via IPO.

In light of companies now being able to raise more cash from venture capital and private equity than ever before, it’s plausible that 2021 was the outlier. In fact, we will see IPO activity continue to stagnate for the next few years.

Alternative exit routes

IPOs are not the only exit route available for private companies, alternative exits include acquisitions and direct listings.

12 upcoming IPOs in the UK

When looking ahead at what 2023 holds for potential IPOs, Stripe, InstaCart and Klarna are looking likely (although Klarna’s valuation would need to recover first). But what can we predict for the UK? Taking into account factors such as stage of evolution, funds raised, latest valuation, as well as rumours in the press, we have profiled 12 companies that we suspect might float in 2023.

Low6

Low6 is the developer of a sports gamification app. This Birmingham-based startup has raised £13.6m across three equity rounds, taking its post-money valuation to £20.9m. In its latest round in October 2022, Low6 raised £436k from Australian online wagering company, BlueBet.

Rumours of a Low6 IPO started after it closed $5.00m (£3.72m) in an equity round in January 2022. This round was dubbed a ‘pre-IPO funding round’ by FINSMES. Whilst there were some predictions of a 2021 IPO, this was likely postponed while they waited for a better economic situation. If the global economy starts recovering this year, we could well see a Low6 IPO.

Blockchain.com

Blockchain.com is a fintech that develops an online cryptocurrency wallet and also provides a range of search tools, statistics and charts for cryptocurrency markets. To date, it has raised £356m in equity funding over five rounds. This blockchain company has made four acquisitions so far: Stratagem Technologies, AiX, SeSocio and Magic Carpet AI. Notable investors include GV (Google Ventures) and Mosaic Ventures.

Back in April 2022, Bloomberg reported that this cryptocurrency company has started interviewing banks for an IPO; although sources told Bloomberg that the IPO may happen in 2023, or perhaps not at all. In the context of the recent FTX collapse and a huge drop in the share price of rival Coinbase since its IPO on the Nasdaq in April 2021, perhaps Blockchain.com will opt to continue its growth through acquisitions instead. If we do see an IPO, it may be more likely to be in across the pond as the firm has encountered issues with regulatory approval from the Financial Conduct Authority (FCA).

Happy Drinks Co

Trading also as Skinny Tonic, this Liverpool-based startup makes a range of soft drinks as well as flavoured low-calorie tonic waters which are free from chemical sweeteners. Happy Drinks Co has raised £11.2m over five equity rounds with the most recent round occurring in April 2022 which saw an investment of £5.40m from Seedrs. This places the company at a post-money valuation of £48.7m. Other investors in the company include Future Fund which is managed by British Business Bank.

In a March 2022 interview with The Times, the company confirmed that they are hoping to float within 18 months. Co-founder Steve Wilkinson clarified: “We’re not looking for an exit route. An IPO would enable us to pursue a game-changing revolution in the soft drinks market.”

WeShop

This e-commerce company developed an app that combines social media and shopping, allowing users to discover what the connections in their social network are buying and shop for the same items on the WeShop app. Back in July 2022, it launched itself as the world’s first community-owned social e-commerce platform as it offers shoppers shares every time they make a purchase. In turn, WeShop shareholders (its users) are able to decide on crucial aspects of the business from dividend policy to election of the board. This SaaS company has raised £7.54m over 10 equity rounds from investors such as Primorus Investments and Vela Technologies.

The Independent reported in July 2022 that WeShop was looking to float on the Nasdaq within a year, giving away up to 90% of its shares to shoppers through its community-owned structure. Despite the volatility of the stock market, the Evening Standard reported in December 2022 that WeShop is on track for its 2023 IPO. Whilst the IPO date is dependent on achieving a good valuation, the company remains confident this will be plausible within their initial timeframe of 12 months.

Cornish Lithium

Cornish Lithium is undertaking an exploration into the potential for lithium mining in Cornwall. Described as ‘the new gasoline’ by Goldman Sachs, lithium is growing in demand as its usage in batteries and renewable energy storage systems increases. In line with this trend, Cornish Lithium has raised £33.5m over nine equity rounds from Crowdcube and TechMet. It has further received £6.57m across eight grants, with the most recent one coming from Innovate UK in October 2022.

Whilst the company was initially set to IPO in 2022, this was postponed due to tough market conditions. Cornish Lithium’s CEO Jeremy Wrathall told The Times last October that, “the problem is the markets are all over the place, very difficult to read… In times of great uncertainty, when we don’t need to IPO, we decided that we wouldn’t for the time being.” We predict an IPO may well occur this year given the right conditions and a decent valuation.

4most

4most offers financial consultancy, particularly services in credit risk, and has clients ranging from challenger banks to traditional financial institutions. Founded in 2011, 4most has raised £3.27m across two rounds from funds such as UK SME Credit Fund. Since its incorporation, it has been featured in numerous high-growth lists from Fast Track 100 2015 to FT 1000 2020.

4most CEO Robert McDowell stated in December 2022 the company’s intentions to list in spring. This would be the first time a majority employee-owned business floats on the London Stock Exchange (LSE). The IPO is said to be valued at £100 million and to take place on the AIM. Regarding the nature of the IPO, in which employees with be the majority beneficiary of the profits, McDowell told The Times, “It’s a social and progressive offering that not many companies can give.”

Xmos

Xmos is a deep tech company that designs and retails processors and semiconductors. It has triggered an impressive six out of our eight high-growth measures, including both a 10% and 20% scale-up. This academic spinout from the University of Bristol has raised £59.0m across seven rounds from investors such as Molten Ventures and Harbert European Growth Capital, as well as three grants worth £2.71m. Another accolade to add to a long list is the success of Xmos’s spinout company, Graphcore. This unicorn company has developed a processor optimised for machine-learning tasks and technology to accelerate machine-learning applications both in servers and in the cloud.

Rumours have been circulating of an IPO event for Xmos for the past decade, but the company is yet to comment on these. The recent appointment of Paul Goodridge as an advisor has once again fuelled rumours of an IPO as a result of Goodridge’s experience in successfully delivering the IPO of CSR in 2004. Coupled with the backing of a number of investors who pride themselves on having a long-term, global view, including Amadeus Capital, Robert Bosch Venture Capital and Draper Esprit, a 2023 IPO for Xmos may well be on the cards.

BrewDog

Brewdog is one of the UK’s most famous startup success stories, and Scotland’s only active unicorn company. Co-founded in 2006 by James Watt and Martin Dickie, BrewDog claims to be the catalyst of the craft beer revolution. The company’s growth journey so far has been nothing short of impressive, with £320m raised over 15 funding rounds enabling the company to open a chain of craft beer bars and expand to the US and Australian markets. Brewdog has also secured £2.38m worth of grants, achieved 20% scaleup status and been featured on 32 high-growth lists. In 2014, the company attended the ELITE accelerator, sponsored by the London Stock Exchange. If Brewdog did float on the LSE, we may well see it in the FTSE 100 index.

The company has been discussing and proactively planning an IPO—hiring law firm Freshfields to help in January 2022—and appears to be waiting for the perfect market conditions. CEO James Watt told Insider in June 2022, “as much as we would like to do an IPO, the market conditions at the moment are just not conducive, but it’s something we’re committed to doing and we continue to get ready.” We anticipate an IPO date potentially set this year.

Omnio

Omnio develops software for banks and other businesses, providing financial and payment services. Rather than disrupting incumbent firms like many other fintechs, Omnio’s banking-as-a-service (BaaS) platform aims to empower banks and large corporations to innovate and advance their digital banking offerings.

The company is based in Westminster and has raised £38.6m to date, across two rounds. The latest of these closed in March 2021 and raised £25.9m from the Spanish fund, GrayBella Capital. The investment was intended to fund expansion across UK and Europe and was labelled as a ‘Pre-IPO Convertible Bond’ round. At the same time, Omnio announced that it was “aiming for a listing in the foreseeable future.” In December 2021, Omnio CEO Adrian Cannon told TechBlast about the company’s M&A ambitions, and plans to IPO “probably late next year or middle of the year after.” Omnio might enter the main market in London, New York, or even Sweden.

Onfido

Onfido develops software designed to verify a customer’s identity by assessing the legitimacy of their government ID and facial recognition technology. The digital security company, which draws on artificial intelligence technology, has attended both the Future Fifty accelerator (2017) and the Mayor’s International Business Programme (2016). To date, it has secured £177m of funding from Augmentum Fintech, Brightbridge Ventures, Crane Ventures, M12 (formerly Microsoft Ventures), Salesforce Ventures, SoftBank Capital, and Talis Capital, among others.

Rumours have been swirling that Onfido is seeking to list across the pond, after growing quickly in the US. In June 2021, The Telegraph reported that it “has begun switching from British accounting rules to US standards in preparation for a potential US IPO in the near future.” It’s most likely that the company is biding their time, waiting for the right moment to float. It has hired executives, Faisal Chughtai and Nello Franco, in preparation. Mike Tuchen, Onfido CEO, has emphasised the pair’s experience with IPOs and public companies.

Lyst

Lyst is a fashion technology company and premium shopping app that aims to help users find fashion items from brands. The scaleup company, which is now in its Growth stage of evolution, attended the Future Fifty accelerator in 2013 and has raised a total of £122m of investment from various investors. These include 14W, Accel Partners, Balderton Capital, C4 Ventures, Fidelity International, Giano Capital, Molten Ventures, and Novator Partners.

Its penultimate funding round in May 2021, which raised £60.2m, was labelled by the company as a pre-IPO round. Techcrunch reported that the time and location of the IPO are still to be confirmed, but that it would likely take place between one and three years after the funding round. In which case, it could be on the cards for 2023.

Zopa

London-based fintech Zopa operates a peer-to-peer lending site. The company was accelerated by Tech Nation’s Future Fifty programme in 2013 and has since gone on to raise £516m, across 13 funding rounds. Investors include Arrowgrass Capital Partners, Augmentum Fintech, Balderton Capital, Benchmark Capital, Bessemer Venture Partners, Chimera Investment, Corigin Ventures, Forward Partners, Northzone Ventures, and Softbank Vision Fund.

In October 2021, the company raised a £220m funding round at a reported valuation of £750m, securing its place in the UK’s unicorn herd. At the same time, it announced plans to list in London as early as Q4 2022. Zopa CEO Jaidev Janardan told the FT, “we think we are ready [to list], but one thing I would like to have is a track record of profitability before going public.” Much like some of the other companies on this list, Zopa is also delaying its IPO until the right time. In a June 2022 interview with CNBC, CEO Jaidev Janardana commented, “the markets have to be there,” for the Zopa IPO, and in 2022, the market simply was not.

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