Has the tide turned for UK flotations?

Once, London was where the world came to float. Today, the City’s IPO market is a shadow of its former self, overtaken by Mexico, Singapore and even Oman. But after years in the doldrums, whispers of revival are starting to reverberate in the Square Mile.

From tinned tuna to tech, a new generation of founders and financiers think it might finally be time to test the waters again. The scale of the decline can be seen in the data. The London stock market slipped to 23rd place in the global rankings for IPOs in the first nine months of 2025.

Total volume raised dropped 69 per cent to $248m (£185m) in the same period, compared to last year. That’s the smallest amount raised in 35 years and down from a peak of $51bn in 2006 when Vodafone and Unilever tapped the home market for billions.

London has also been hit by high-profile companies transferring their main listing to New York (such as online payment company Wise) or delisting altogether (such as Just Eat Takeaway). To compound the pain, homegrown success stories such as fintechs Monzo and Revolut have so far shunned IPOs in favour of tapping venture capital to fund growth as part of the so-called “private for longer” theme. But London could be about to stage something of a recovery.

Small business lender Shawbrook achieved a £1.9bn valuation when it floated at the end of October (the largest IPO by a UK-based company in two years). A day later tinned tuna company Princes Group floated at a £1.2bn valuation. The share prices of both initially fell but then recovered to trade above their listing prices.

A “pipeline” of dozens more companies are said to be exploring possible London IPOs, with increasingly solid rumours around bookseller Waterstones, fitness wear company Gymshark, fintech SumUp, travel agent loveholidays and Norwegian software company Visma, which has a valuation of €19bn (£16.5bn).

One of the most recent to float in London was The Beauty Tech Group (TBTG), the Manchester-based maker of LED face masks used by Kim Kardashian and Serena Williams. Meanwhile, European exchanges have seen a spate of large IPOs, including €13.7bn Verisure on the Nasdaq Stockholm.

Laurence Newman, founder and chief executive of TBTG, says that many of his advisers thought he had “gone slightly mad” when he first revealed his intention to float in London. “‘There are no IPOs anymore’; ‘the market is a disaster’; ‘AIM is finished’ – these were the sort of things I heard,” Newman said of reactions from his closest advisers.

“Look, not every business will suit an IPO, but we had quite a large shareholder base built up over lots of years of different rounds of investments, so it felt quite a clean way of clearing that cap[italisation] table up. And having a kind of restart that fitted our chronology and fitted the shape of our business quite nicely,” he said. Newman didn’t rush straight out with an IPO roadshow.

Instead, he started testing the market with “very early looks meetings” to gauge sentiment among potential investors. The advice he received was to “make sure you come to the market at the right price and make sure everyone’s going to have enough of an incentive moving forward,” he said.

“We also did a huge amount of work to convince the banks that we were a company that they wanted to work with and could deliver a successful IPO,” he added. “So, there was even a big piece of work before the work. It was a long, long way off a slam-dunk a year ago.”

From the early exploratory talks, Newman got a “good sense that people really wanted to see a business like ours come to market”.

“But it was also clear that it was going to be very difficult and we needed to go wider and get lots of different types of investors to come to the table,” he said. “It is a very different [market] to 2020-21, when people were able to list their companies reasonably easily at ridiculous valuations, and we know what mayhem that caused.”

Newman said it is important to go into the market very aware of how the situation has changed. “You have to think that we are coming in on the back of poor economic conditions and a reticence caused by the failed IPOs of the past.”

In seemingly endless investment roadshows, Newman had six key messages for potential investors: “It’s a good business; we’ve got the right valuation; it’s a British business; it’s technology; it’s got an international market; and it’s founder-led,” he said. “If this can’t float, you’re never going to invest in a business floating.”

TBTG floated on the London market at 271p on October 3. By the end of the day, the shares had risen to 281p, giving the company a market value of about £320m. Newman was determined to float TBTG in the UK and not be swayed by potentially higher valuations in the US.

“I built this business from scratch in the UK, and there were no businesses coming to market in the UK, so I almost felt a duty that we should list in the UK,” he said. “I think it was the right thing to do. So far, we’ve been proven right, but we will have to wait and look at the share price in a few years’ time to know for sure.”

Newman said that if he had listed TBTG in the US, he might have attracted more investment, but “it would have been lost in the swirl, as this is a smallish deal”. By listing in a relatively dormant London market, “we have also generated a huge amount of PR and awareness of what is a new technology”.

Newman’s advice to other founders is to spend a lot of time exploring the options and making sure listing is the right thing to do. “The one thing you don’t want to do is go down this route and for it to not be successful,” he says. “It’s a very costly process, and incredibly time-consuming, taking away key personnel from the day-to-day operation.

“There’s a lot of scrutiny on everything because people had their fingers burnt in the past. It’s a good thing, but I feel we had to go through a much longer than necessary process to get those funds to deploy their cash.”

Reviving the London listing market is a key aim of the chancellor, Rachel Reeves, who this summer created a “listings taskforce” designed to attract “the best and brightest business from around the world” to float in London.

She called entrepreneurs running “pre-IPO” companies to 11 Downing Street in October to “hear your views on the attractiveness of the UK as a listing destination for firms, and on the extensive package of reforms the government has undertaken to boost the competitiveness of UK capital markets”.

Attendees included Waterstones’ boss James Daunt and Gymshark founder and chief executive Ben Francis.

“We need to stop talking the UK down,” says Alexandra Depledge, a serial entrepreneur and entrepreneurship adviser to the Treasury, who co-chaired the meeting with Reeves. “There is a narrative at play in the UK that our IPO market offers lower valuations, shallower capital and poorer performance than our friends across the water.

“So, I loved sharing the stat that in the past 10 years, 20 British companies have IPO’d in the US, 10 have de-listed, seven are trading on average 70 per cent below their flotation price.”

That said, she says there’s still a lot of work to do to instil more confidence in London listings. The first move of the listing taskforce was an extension to the stamp duty exemption on trading in newly listed companies. The 0.5 per cent relief was only valid on the day of the IPO but was extended to three years from the day of listing at the Budget in November. The US, China and Germany have no equivalent tax on share transactions.

Charles Hall, head of research at investment bank Peel Hunt and a long-term campaigner for reforms to encourage more market activity in the UK, said the stamp duty holiday was “absolutely to be applauded”. However, he questioned why it was not being extended to all share trading, which he said would encourage far more economic growth than the tax would raise.

“There is still a lot to do to make it compelling for companies to want to list in the UK,” Hall said. “It’s encouraging that listings are coming along now and we are actively engaging with a number of exciting float candidates, but it has been an exceptional fallow period and we need fundamental changes to attract more.”

Saul Klein, the veteran tech investor who co-founded LoveFilm, believes the growth of private market capital is providing real opportunities for companies to scale without having to IPO. “[Public markets] are still the best form of liquidity for businesses. It’s about having access to capital at scale so you can grow and you can invest,” he said.

“The public markets are still an incredible venue for that. But something that has been decades in the making is the growth of the private markets, [which] by 2030, 2035 will be $60tn.”

Julian Morse, co-chief executive of investment bank Cavendish, agreed with Klein that the IPO drought has been at least partly caused by the easy availability of private capital.

“IPOs haven’t been the only way to go for a lot of companies, which have looked to the thriving and growing private equity sector to fund their growth,” he said. “The pendulum has swung very heavily towards private equity, but we are starting to see a swing back to the IPO.

“For a long time, the rhetoric has been ‘why would you want to be a public company when you can get the same capital from private sources and not be in the public eye?’” he added.

Morse said confidence and capital in the public markets are beginning to build but it will take time for that to translate into IPOs, which need at least three to six months to organise. “When the first few started hitting the market they increased awareness of IPOs as a viable option and that creates its own momentum,” he said.

“The first big one of the year, [accountancy firm] MHA, helped others come to market. It is still very early days, but just anecdotally, we are actively involved in bringing at least six companies to market.”

Morse reckons a “mega cap” IPO – worth at least $200bn – could be possible, but only if the valuation looks cheap and private equity capital becomes less available. Michael Jacobs, a partner specialising in equity capital markets at law firm Herbert Smith Freehills Kramer, said the pipeline of companies looking to come to market has “never been longer”.

“You’ve got VC-backed, high-growth companies that want an exit for investors and liquidity for founders. You’ve got private equity-backed companies and platforms which are now, realistically given the re-rating of interest rates, too big to be obvious candidates for another private equity buyout, as well as the traditional purely founder-led company,” he said. “There are lots of situations where the public markets are now the only viable solution for many companies.”

Jacobs reckons the UK has the “innate intellectual capital” to achieve the government’s goal of creating a homegrown trillion-dollar company by 2035, but only if “we maximise how much productivity gains this country gets out of its finite capital and stops encouraging that to be offshored or held in cash”.

Alongside efforts to revive the UK’s IPO market, successive governments have been pursuing a wider reform agenda to reshape how Britain’s savings are invested, collectively known as the Mansion House reforms. The push is primarily aimed at steering pension and insurance capital towards unlisted alternative assets such as venture capital, infrastructure and private equity.

With defined benefit pension schemes largely de-risked and “de-equitised”, while growing defined contribution funds remain under-allocated to equities and alternatives, ministers hope that by encouraging long-term investment in productive assets the UK can scale more of its own high-growth companies rather than relying on overseas capital.

In parallel, changes to the ISA regime and the Financial Conduct Authority’s review of how financial advice is delivered to retail investors are designed to reboot the UK’s dormant retail equity culture. By making it easier for individuals to invest directly in listed British companies – and ensuring that advice and access are not barriers – the government is hoping to rekindle a sense of public ownership in the markets that once powered economic growth.

“The Mansion House and pension reforms are about mobilising long-term capital for the UK economy, not just chasing higher returns offshore,” Jacobs said. “This represents a once-in-a-lifetime opportunity to rebuild the UK’s pension and retail investor base, reboot the country’s growth-capital ecosystem and help create the next generation of companies to IPO.”