Experts say that Wise’s decision to switch its primary stock market listing to the US is a further indicator that the liquidity of the US market will continue to pull UK tech firms and startups across the Atlantic.
Wise, a money transfer fintech founded by Estonians Kristo Käärmann and Taavet Hinrikus and headquartered in London, has been listed on the London Stock Exchange since 2021.
However, today Wise, founded in 2014, said it plans to switch its primary listing from London to New York, marking another body blow for the LSE.
Wise said the move would boost its investor pool and boost its valuation. The plans will now be put to a shareholder vote.
Wise said the move would expand “the pool of investors able to invest in Wise, in particularly US domestic institutional and retail investors, the largest global constituent of investors, many of whom are currently unable to hold our shares".
Käärmann, Wise CEO, said shifting its main listing would help “drive greater awareness of Wise in the US, the biggest market opportunity in the world for our products today, and enabling better access to the world’s deepest and most liquid capital market".
He added: “A dual listing would also enable us to continue serving our UK-based owners effectively, as part of our ongoing commitment to the UK.
"The UK is home to some of the best talent in the world in financial services and technology, and we will continue to invest in our presence here to fuel our UK and global growth,” in comments reported by the Guardian.
Under the plans, Wise would be dual-listed, holding a secondary listing in the UK.
Wise’s announcement follows news that Glencore-backed metal investment firm Cobalt has axed plans to list in London while Nik Storonsky, Revolut CEO, said it was "not rational" to list its shares in the UK saying “it is less liquid so it is much worse compared to the US. Plus it is more expensive because you pay stamp duty. It is just not rational”.
Claire Trachet, CEO of tech business advisory firm Trachet, said the move by Wise was emblematic of a recent shift of companies no longer listing where they were founded ”but where capital markets best support their next phase of growth. For UK startups, especially in fintech, it’s a signal that global scale increasingly means accessing US liquidity".
Whether other UK tech firms and UK startups would jump ship to the US, she said: “Some startups already have, others are preparing for it. But importantly, there’s still a cohort of ambitious British and European companies - from Zopa to Monzo - that want to list here, if the ecosystem gives them enough reason to.
"What’s needed now is not just policy change, but belief, coordination and vision across the public and private sectors.”
On the reputation hit to the LSE, she said: “The LSE’s reputation won’t be defined by one move - but by how it responds. London is still the most mature listing venue in Europe, and we have the opportunity to double down on that leadership by being bold. Not defensive.”
Philip Salter, founder, The Entrepreneurs Network, said the move is a jolt to the UK startup ecosystem to improve its late-stage funding ecosystem.
He said: "By retaining an LSE line, Wise shows that UK startups can scale globally without cutting their home ties, while still channelling talent, taxes, and retail-investor gains back into the UK ecosystem.
"But it needs to anchor its primary listing in New York is a reminder that the UK urgently needs to deepen its late-stage funding coverage if it wants the next wave of scale-ups to price their growth at home. Until then, UK founders will need to build with US investors in mind from day one."
Matt Cooper, Co-CEO at Crowdcube, the crowdfunding platform, said: “Wise’s decision is a setback for the LSE - but it’s not surprising if you have been following the outflow of companies from the main markets in the UK over recent years.
“It’s a reflection of the challenges the LSE is facing and why it is working hard to innovate and evolve.
“While the battle between the UK and EU markets and their US counterparts will continue to rage, let’s not lose sight of where the UK can still lead and innovate.
“The real momentum is in the private markets, where upcoming reforms like the Public Offer Platform (POP) regime will make it materially easier for companies to raise substantial amounts of capital directly from the public."
IMAGE:PIXABAY
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