Two UK fintech companies, Starling Bank and Thought Machine, are
exploring the possibility of going public in moves that could strengthen
London’s reputation as an international financial hub.
Starling
Bank is reportedly contemplating the initiation of preparations for an initial
public offering (IPO) and has received pitches from multiple investment banks,
including Rothschild & Co., in recent weeks, according to sources familiar
with the matter.
A
senior executive from Exchange Group Plc held discussions with Paul Taylor, the Chief Executive Officer of Thought Machine, at a technology industry event last
month to advocate for a share offering in the UK. However, both London-based
firms are not expected to go public immediately, according to insiders.
Thought
Machine may not pursue an IPO until 2025 or later, as the software company
demonstrates its ability to effectively execute complex technology
transformation projects with banks. In Starling Bank’s case, the appointment of
a permanent CEO is deemed necessary before it can be deemed ready for a public
listing.
While
Thought Machine confirmed that an IPO remains a long-term goal, it is currently
in the early exploratory stage and does not have specific timelines to share.
Representatives for the London Stock
Exchange, Starling Bank, and Rothschild declined to comment on the matter.
London Faces Pressure as More
Companies Look to US Markets
This
potential move by UK fintech firms to go public aligns with the effort to attract
more companies to list in London amid concerns that fewer businesses are
choosing London for new listings, and some existing firms are delisting in
favor of markets like in New York due to higher valuations, deeper capital
markets, and less scrutiny of executive pay.
Furthermore,
UK regulators have proposed significant changes to the listing rulebook as part
of their efforts to enhance London’s appeal as a financial center.
Thought
Machine was valued at $2.7 billion in a fundraising round last year, while
Starling Bank recently reached a valuation of £2.5 billion ($3 billion). Starling
Bank, established in 2014 by Anne Boden, achieved its first annual profit in
the year ending March 31, 2022, with profits surging from £32 million to £195
million during the subsequent 12 months.
Starling Bank is
widely anticipated to choose the UK as its listing venue, reflecting where the
majority of its business operations are based. Thought Machine, founded in
2014, provides software solutions to some of the world’s largest banks and
counts JPMorgan
Chase & Co. and Lloyds Banking
Group Plc among its backers. The company could still opt to list in the US
given its expanding presence in the country, as per sources familiar with the
matter.
Two UK fintech companies, Starling Bank and Thought Machine, are
exploring the possibility of going public in moves that could strengthen
London’s reputation as an international financial hub.
Starling
Bank is reportedly contemplating the initiation of preparations for an initial
public offering (IPO) and has received pitches from multiple investment banks,
including Rothschild & Co., in recent weeks, according to sources familiar
with the matter.
A
senior executive from Exchange Group Plc held discussions with Paul Taylor, the Chief Executive Officer of Thought Machine, at a technology industry event last
month to advocate for a share offering in the UK. However, both London-based
firms are not expected to go public immediately, according to insiders.
Thought
Machine may not pursue an IPO until 2025 or later, as the software company
demonstrates its ability to effectively execute complex technology
transformation projects with banks. In Starling Bank’s case, the appointment of
a permanent CEO is deemed necessary before it can be deemed ready for a public
listing.
While
Thought Machine confirmed that an IPO remains a long-term goal, it is currently
in the early exploratory stage and does not have specific timelines to share.
Representatives for the London Stock
Exchange, Starling Bank, and Rothschild declined to comment on the matter.
London Faces Pressure as More
Companies Look to US Markets
This
potential move by UK fintech firms to go public aligns with the effort to attract
more companies to list in London amid concerns that fewer businesses are
choosing London for new listings, and some existing firms are delisting in
favor of markets like in New York due to higher valuations, deeper capital
markets, and less scrutiny of executive pay.
Furthermore,
UK regulators have proposed significant changes to the listing rulebook as part
of their efforts to enhance London’s appeal as a financial center.
Thought
Machine was valued at $2.7 billion in a fundraising round last year, while
Starling Bank recently reached a valuation of £2.5 billion ($3 billion). Starling
Bank, established in 2014 by Anne Boden, achieved its first annual profit in
the year ending March 31, 2022, with profits surging from £32 million to £195
million during the subsequent 12 months.
Starling Bank is
widely anticipated to choose the UK as its listing venue, reflecting where the
majority of its business operations are based. Thought Machine, founded in
2014, provides software solutions to some of the world’s largest banks and
counts JPMorgan
Chase & Co. and Lloyds Banking
Group Plc among its backers. The company could still opt to list in the US
given its expanding presence in the country, as per sources familiar with the
matter.
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- Source: https://www.financemagnates.com//fintech/starling-bank-considers-ipo-preparations-thought-machine-may-follow-suit/
