UK has record year for tech IPOs in 2021

Tech companies represented 29% of all UK initial public offerings last year, raising a record $6.6bn

Technology companies raised a record £6.6bn from initial public offerings (IPOs) in 2021, more than double the £3.1bn raised in 2020, according to figures from the London Stock Exchange (LSE).

A total of 126 companies listed in the UK in 2021, raising a total of £16.9bn. Of these, 37 (or 29%) were tech companies, including fintech Wise, consumer review site Trustpilot, online marketplace Auction Technology Group, and ride-hailing app Deliveroo.

Financial technology (fintech) and e-commerce firms were the dominant categories, with seven and 10 listing, respectively, throughout the year. By comparison, only eight tech companies had IPOs in 2020.

“2021 was a brilliant year for UK tech and it’s great to see just how many companies have grown from startup to scaleup, to finally becoming publicly listed businesses on the London markets,” said digital minister Chris Philp.

“Global investors hold London’s capital markets in high esteem and as we implement clear governance around innovative fast-growth companies, including rules around AI [artificial intelligence] and data, we believe even more companies will appreciate the advantages that listing in London can give them.”

According to figures from database management firm Dealroom, the UK is now home to 116 unicorns (tech companies valued at $1bn or more) and currently has 213 high-growth companies that are predicted to reach unicorn status.

Of these, 29 unicorns were created in 2021 alone, including e-commerce platform Depop, car-selling platform Motorway, core banking fintech Thought Machine and challenger bank Starling.

The wider UK tech sector also saw record growth in 2021, with UK startups and scaleups receiving £29.4bn in venture capital (VC) investment – a substantial increase on the £11.5bn invested in 2020.

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  • The National Security and Investment Act, which gives the UK government powers to intervene on M&A deals in 17 tech-related areas, has now come into force.
  • New figures on UK business creation show surge in entrepreneurs setting up technology businesses during 2020, while the sector’s hiring efforts climb back to pre-pandemic levels.
  • Projects have been delayed over the past six months because of a lack of appropriate skills, with half of managers unable to find the workers with the necessary tech skills, survey finds.

“The road for tech startups from pre-seed to IPO and beyond has become a lot shorter, and that is testament to the quality and breadth of the UK tech industry,” said Yoram Wijngaarde, founder and CEO of Dealroom. “The maturing ecosystem has led to an increase in investor confidence, which is likely to grow further over the next few years as more scaleups get ready for the next step.”

John Glen, economic secretary to the Treasury, said the success of these firms was due to UK markets providing companies with deep, mobile pools of capital to fund and grow their businesses. “The government is working with firms, the regulators and the stock market to make the UK even more attractive for companies to list, including by reforming our listings regime following Lord Hill’s independent review, alongside broader capital markets reforms,” he said.

Lord Hill’s UK listings review was published in March 2021, and was undertaken to strengthen the UK’s position as a global financial centre. It put forward a number of proposals – including allowing dual-class share structures in the premium listing segment and making free float requirements more flexible – which were taken forward by the government and the Financial Conduct Authority.

UK technology startups addressing one or more of the United Nations’ Sustainable Development Goals (SDGs) – known as “impact startups” – raised more than £2bn in 2021, up from £1.7bn in 2020.

In October 2020, previous data from Dealroom and entrepreneurial network Tech Nation revealed that investment in impact startups increased nearly tenfold between 2014 and 2019.

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