London Stock Exchange - What’s driving tech IPOs in London

Speaker 1 00:00:04 Welcome to London Stock Exchange's Tech i p o podcast. We'll be speaking to some of the smartest thinkers in tech and business about their journeys to this point, discussing the tough decisions made along the way, all while getting a behind the scenes view of the London markets. And I'm your host, Stephen Kelly, chair of technician. And personally, it's just absolutely great for me to be back at London Stock Exchange. This is the beat in heart of the financial center of one of the greatest financial centers in the world, both in terms of with a great history and heritage, but an incredible future. In this episode, we're gonna discuss what a leader can expect when taking their company public, and some tips for a smooth i p o and initial public offering, as well as some of the trends among tech and consumer internet companies in the UK and globally. I'm really lucky to be joined by two leaders from the London Stock Exchange itself. Charlie Walker, head of Equity and fixed income for London Stock Exchange Group, as well as Neil Shar, London Stock Exchange is senior tech specialist. And in just the first half of 2021, Neil and Charlie have already supported the public debut of over 49 companies into the London market. So hello to you both, and it's really great to be here. Charlie, how are you doing? Yeah, Speaker 2 00:01:30 Very well, thanks Steven Speaker 1 00:01:31 And Neil. Speaker 2 00:01:32 I'm great. Thanks Steven. Speaker 1 00:01:34 Charlie, let's just start maybe, um, talking to us about kind of 2021 and what's happened to the I P O market and, and tell us about this incredible and significant momentum. London Stock Exchange is seeing. Speaker 2 00:01:47 It's certainly been a very, very busy start to the year is, it's also very different year to last year. If you look back in 2020, January and February, sort of relatively normal start of the year, and then all of a sudden when the pandemic hit it, really, all of the market's focus was on recapitalizing companies, on the exchange, helping companies get, get through it. It was a, it was a really sort of powerful time in a way to show actually the good that public markets can, can do, helping companies raise capital to get through, get through the pandemic. And you also, you know, we'll talk a little bit today about the UK ecosystem, the regulators, the government, the exchange, but last year we also saw how powerful that combination can be when they're trying to allow companies to raise capital that they need. What you saw in March, April last year was all of those different bodies really rallying around to change rules, regulation, just, uh, really being sort of, um, nimble to allow companies to raise capital. Speaker 2 00:02:42 And the result of that, or, um, partly as a result of that was you saw 50 billion pounds last year raised on the exchange, um, really helping, you know, companies support jobs and, uh, and get them through, get 'em through the pandemic in, in many instances, I think this year has been completely different to that, you know, um, uh, I'm conscious, obviously the pandemic is still ongoing, but from a public market's perspective, the, the focus really has shifted in 2021 towards IPOs. And so you've seen, um, incredible volumes of ipo. O you mentioned 49 in the first half. You know, I was looking at the stats before we, uh, came down to record this. We've had seven more in the last, uh, 12 days, and just, so we've got sort of 57 or so IPOs now, and you compare that to the whole of last year where the number was 40 for the whole of last year. Speaker 2 00:03:29 So you're just seeing sort of incredible, incredible momentum. And those companies have raised just an excess of 10 billion pounds of capital at I P O. I think what's amazing is that that's the largest amount of any exchange in the world outside of the US and Grace China and I think sort of shows the ability for the London financial, um, ecosystem to really sort of support support companies. I think the other thing is, and, and we'll get on to talk a little bit more about this, but of all of that capital that's been raised in I p o, over 50% of it for the first time has been from technology or technology enabled companies. You know, that's a big shift from what we've seen sort of historically. So it's been incredible seeing, um, founders, entrepreneurs, technology companies using the exchange to, um, achieve their future ambitions to fund product development innovations, you know, acquisitions, whatever it may be. Um, I think has been, you know, really, really pretty inspiring. And those technology and technology enabled companies are, um, they've had a market capitalization of close to 30 billion pounds that have been added to the exchange in the last six and a half months. So yeah, it's been a, it's been an incredibly busy, but an incredibly sort of exciting time for us all here. Speaker 1 00:04:42 Hey, Charlie, that, that's absolutely fantastic, and it kind of explains why you folks have, and the team here have been just so incredibly busy. A and no, just commentators in the media use words like a bonanza and like a golden era or a golden decade for London and UK technology. So why do you think all these tech and consumer internet companies are choosing to I p O now and I guess, you know, why are they choosing London? Speaker 3 00:05:12 Great, great question, Steven. Um, I think it, this has been a long time in the making, and, um, if you think about why companies should I p O I in the first place, I think there's, you know, many reasons for that. Firstly, I think it's the most natural route for a company to grow its business, to stay independent. I've met so many companies over the years as a banker that, you know, aspire to sell their businesses to Apple or to Microsoft, to I, to ibm. You never really know what those buyers are looking for. And it's much easier to build a business that, you know, many investors w want to back, um, you know, something with scale growth, um, eventually profits, but you know, not, uh, necessarily prerequisite. It's easy to, to do that, uh, and, and target an I P o. And, um, you know, as a board, you're always looking to maximize value for your shareholders. Speaker 3 00:05:59 Now, it's helpful that public company valuations lend themselves, uh, towards an I P O versus, uh, it's not always been like that. But, uh, you know, today that, that certainly works. And once you're a public company, you know, you've got the profile of being a listed company. Anyone can see your annual report, your balance sheet, see the financial strength, um, behind your business. It's easy to incentivize staff. You can give, you know, your shop floor, staff shares. You can use those shares to incentivize management teams from all over the world. You can use that list of paper to go make acquisitions. So I think there's a lot to be said for that profile. It's very easy to raise capital. Charlie touched on, you know, how accessible the public markets were in the pandemic, when most people would've thought the, the stock market would've been closed, but it was wide open in, in London, over 50 billion pounds raised. Speaker 3 00:06:47 And, you know, it's not just the I p o capital, but it's ongoing, right? Um, so I, I think there's, you know, so many things, um, that support that, uh, bit being illicit company. Of course there's a liquidity as well. So one of the unique things about our market is that PE and VC funds can sell down at I P o, they can achieve liquidity hasn't always been the case. But today, you know, fund managers are indiscriminate. They just wanna see good companies come to market, and they don't mind if you're raising primary or secondary capital that they'll support that. Now, the second part of your question was, you know, why, why London? And I, you know, I used to ask myself that, but I think today it's really what, why not London? I mean, there's so much going for London. If you're a British company, first of all, there's that home market advantage. Speaker 3 00:07:30 Customers know who you are, investors know who you are. Uh, the media know who you are. And I think that, you know, helps a lot. Um, there used to be this thing called the London Discount, really, I think is a myth. I posted a series of tweets recently. You look at valuations for European tech companies, you compare them apples with apples to their US counterparts. I think you'll find that, um, the size of the company or listing venue doesn't affect valuation. It's really the quality of that, those earnings. And, you know, if you are delivering hyper growth and and burning to fund that, that's fine. Um, if you are mature and and profitable, that's also fine. Uh, the better company usually gets the higher evaluation. Um, I think UK analysts and investors understand tech. They've backed 27 IPOs of tech and consumer internet companies year to date, um, which is testament in itself. Speaker 3 00:08:20 And, you know, it's not just UK investors here. You can access those US investors as well. You don't need to, uh, uh, na Nasdaq or NYC listing to get access to, uh, US investors that make up 30 40% of, uh, issuers, um, registers here in, in the uk. You don't need to be unicorn to list in London, which I think is often lost, right? If you take a company like pension, B, they had 6 million pounds of revenue last year. Trust Pilot had a hundred million of, of revenue, Darktrace had 200 million. But, you know, we can support the big companies as well as those early, early stage businesses. And that's testament today. If you look at, um, you know, lend investors come to, to aim, um, in the FinTech space, about 250 billion pounds of market cap. And you contrast that to wise with 8 billion pounds of market cap, both can work perfectly well in in London. Speaker 1 00:09:09 That's brilliant, Neil. And you know, I think what you talked about in terms of myth busting around the valuation gap, you know, that phrase mind the gap. I don't think it exists at all. And, uh, you're absolutely right to put the stats out there. Cause I think in London the evaluations are very attractive and they compare incredibly well with any market, uh, and exchange around the world. And the other thing, I guess, you know, um, this session's all about demystifying a lot of the process of an initial public offering. And sitting here, having, I guess, a veteran CEO of almost, uh, 50 quarters as a publicly listed company ceo, I, I can vouch for everything you're saying. Uh, it's actually, uh, there's work to do, but it's a lot easier and it just gives you a massive, uh, propulsion as a company to your growth destiny and becoming a market leader around the world. So that's great to hear. And I think, you know, Charlie, I think around that is everybody probably thinks, unless you've done this before and you've done an ipo, it can be really, really tricky and the process can be quite difficult. So where, where can an aspiring company go and get help and advice, and, and how do you navigate these different choices that chief executives, founders and boards face? Speaker 2 00:10:26 Yeah, and I think it can be quite a daunting process, particularly for someone who hasn't sort of been through it before. The, the good news is that, you know, whilst as an individual you may have not been, there's an enormous amount of expertise in London for com for companies and for advisors that have, that have been through it. So there's, there's a whole variety of sources. I mean, I can, I can pick out a few. I think the first one is the LSE itself. Um, Neil and I are part of a global team. Um, we're based obviously here in London, but we've got presence in New York, Dubai, um, Beijing, Tel Aviv, you know, you name it, we've probably got someone there. Um, and that really is an entry point of you, like to the exchange. So the huge amount of information and knowledge that exists within the exchange. Speaker 2 00:11:09 So Neil and I and the team spend a lot of our time talking to CEOs, founders, shareholders, um, about being a publicly listed company about the different options that, that, that, um, that they have to access public markets. The second thing then is that the exchange itself runs a lot of events, and we partner with, um, the advisory community about that. On average, we do, it's about one every week or one every fortnight on average through the course of a year. And again, we do them globally. We actually had our, uh, one of our flagship events only three weeks ago, I think it was called the IPO Forum. We do that every six months where, um, in that specific event, we invite in advisors to talk about, okay, if you are a, um, a sort of aspiring public company, what are the things that you need to do? Speaker 2 00:11:54 When do you need to start doing them? How far in advance do you need to start, start doing them? And also bring in CEOs of companies that have been through it, you know, what are the, um, the lessons, whats, and all assessment as to what are the things that they wish they could go back in time and tell themselves. Um, and so the feedback that we get from those events is, is really wonderful. Those are all accessible on our website. Or again, if you speak to a member of the team that they can, um, they can always, um, in inform you about those. The third area that you people can look at is of our website. We keep that up to date. There's a huge amount of information there. And then I think, you know, fourthly, but, and last, but by no means least, in fact, I'd say actually one of the most valuable sort of sources of information is we're blessed in London to have one of the most sophisticated ecosystems of advisors around the city. Speaker 2 00:12:42 That, of any financial center in the world, whether that's accountants, lawyers, PR firms, investment banks, you name it, we've got them. And they're some of the best in the world. They have been through this process time and time and time again. So they are a wealth, uh, of, of information and a great source of information, particularly even for companies that are looking for early stage guidance. You know, maybe they're not at the point of mandating advisors. It's something that they're thinking about two or three years down the line. Um, the, our experience has been that the, the ecosystem that surrounds London is, you know, more than happy to engage with companies, to talk to 'em about, you know, the positives and negatives, you know, both, both, both sides of it, um, of being a public company and what what companies need to be thinking about in advance. Speaker 3 00:13:23 And, um, Charlie, just to add to that, I think there's a lot to be said about the process in London. Um, you can list a company here in 10 and a half weeks on name. We saw that with phonics. Um, Calex, uh, took about 12 weeks, um, last year. It costs less to list your company and to be a listed company in the uk. Litigation risk is a cost of doing business in the states. Definitely not the case here. I think we've had free class action lawsuits in the last 10 years. D and o insurance is, is a lot lower. And as a management team, you can spend more time running your business because you are reporting half yearly versus quarterly. I mean, you'll know this from your, your days, uh, Steven, um, yeah, how much time, um, meeting investors ca can take up. And yes, it's important, but ultimately the, the drive of your business is, is execution. And as a C E O, you really wanna be fo focused on that. Speaker 1 00:14:14 Yeah, and I think, um, Neo and Charlie, you, you really do a great job. And maybe we'll come back to sort of why London a bit more later, but I, I certainly am sitting here totally supporting what you're saying of life as a public company and, and how London's hugely supportive. So, and it's great. Also, I've spoken to some people who have been through your events, uh, and they've raved about them, uh, and it really demystifies the process. Um, so, you know, again, I guess listeners out there should just check into the London Stock Exchange website and the richness of the information out there, and then obviously backed up Charlie and Neil with the team that you have to help, uh, navigate the journey and the adventure ahead as a public company. So I think that's really useful. And one thing back to you, Neil, really, is that, um, what, what have you seen consistently work for companies in the I P O process? Speaker 3 00:15:06 I think it's really early preparation and, and lots of it, and asking for advice and help when, when you need it. Um, Annie McKinnon, CFO of Moon Pig said to me that the best thing that they did was to hire an IPO o manager in Joe Cave who had seen it and done it before. And, you know, we've seen that in other transactions with Peter Glover at Wise, where you've got an experienced guy or girl who've been through it before, you know, know what to expect, gives management that extra bandwidth to be able to focus on the day-to-day while taking care of the process. An I P O, you know, is really no complex than any other transaction. You could do a private placement or an m and a deal, but, you know, having someone to lean on is, is hugely valuable. So I'd recommend any company to, to seriously look into that. Speaker 1 00:15:54 Yeah. And I, I guess now on, on the flip side though, you know, what have you seen that doesn't work for companies and, and, and what advice would you give them? Speaker 3 00:16:01 It's really when companies are in a rush, and if you've got your back against the wall, um, if you are not listening to that, that advice around you that might maybe saying, you know, hold on a minute, the investors are saying that, that this valuation's not gonna be achievable. Or, uh, you're better off waiting six months and you're not taking that into account. It could be the company could be the board, but you've really gotta a find a team that you can trust in, in your, uh, advisors. And if you've picked the, the bank for example, that's not just listening to the banker, but what's the research analyst saying? What are the sales team saying? What are the market makers saying? What's ECM desk saying? Is that message consistent? And am I hearing all the advice around me? Um, surround yourself with, with a good advisory team and, and listen to that team, um, you know, be rational and not emotional through the process. That's Speaker 1 00:16:52 Great advice. And I think there as well, you know, just looking at the perception of, um, companies, it, it, sometimes there's a time gap between the myths that have been there almost a decade ago. And the current reality, I'm just thinking around this, some media coverage, uh, around UK tech and consumer internet companies listing in the US and, and how much, what is the real kind of stress test of myth versus reality here? Speaker 3 00:17:22 So every few years we see a couple of companies go to the States. Um, in my old role I, at, at, uh, at Stifel, um, I was taking a number of companies public from Europe into the states, and, uh, king Digital was one of my deals. Back in 2014, I was, took a company from France, um, eo another one from Ireland, um, Fleetmatics Public in the, in the States. And historically I think there was a, a strong argument, say your company's public there because, uh, sometimes you get a better valuation. There was a diva pool of, of analysts and investor knowledge, but we've really seen this arbitrage away as US investors been more active in our markets. And, and today, you know, we've had 27 IPOs year to date. Um, we've seen one company in, uh, ait, uh, successfully, uh, go to the States in the last three years. I think there's about three companies. Um, there was in Dava and Farfetch in in 2018. Um, but it's really, um, the minority and stark contrast to some of the headlines that, uh, we see, um, regularly. And I, I think companies and boards really wise up to the fact that you can achieve, you know, so many great things in, in London without many of the costs. So, you know what, why not London? Speaker 1 00:18:39 Um, now we're just seeing almost like at the moment the activity in a stampe towards London, uh, particularly consumer internet companies. What are, what are your sort of predictions for the future Speaker 3 00:18:49 Looking at the H two pipeline, Steven, I mean, it's really as strong as, as H one, um, phenomenal compared to what I've seen over the last, you know, 10, 15 years. And it's a really exciting time to be doing IPOs in London. And Speaker 1 00:19:04 Charlie, just turn it to you. I, I think given obviously the London Stock Exchange, I is national infrastructure and has to be hugely responsible and diligent around security. Uh, the, when I meet you guys, I just can't believe how accessible you are. What, what are the, what are the big advantages of London? Cause I hear it's the most international exchange in the world. Speaker 2 00:19:25 Yeah, it is. And it, it is on sort of several measures. If you think about an exchange, it's really just a meeting point between a company and, and an investor and then a regulatory structure that sort of sits over it. Um, if you take each of them in turns, if you think about the companies that are listed on the London Stock Exchange, um, 38% of them aren't UK companies either they're not headquartered here, or they're not incorporated here, or their primary operations aren't in the uk. So it's a very, very international base of companies that are, that are on the exchange that extends across the markets. But if you take another measure, just look at the footsy 100 at the moment, about 75% of earnings in the footsy 100 are global earnings. They're not in the uk. So it's a hugely international market. And what you find is that, that then mirrors over to the investor side as well. Speaker 2 00:20:14 So investors that are coming to London and looking to invest in London are international in nature, because the companies are international in nature. So of all the companies, of all the investors that are on the exchange or that own shares in the exchange, over 50% of them aren't based in the uk. They're international investors. 33% as, as Neil said, are actually in the states. So you don't need to list in the states to get access to US investors. They can access you in London. So you've got this wonderful melting pot, if you like, of international companies and international investors, all trading through a legal and regulatory system that's respected around the world. Companies have used, um, LSE listed shares to buy companies in more countries around the world over the last few years than any other exchange in the world. You know, LSE listed paper is a almost universally accepted acquisition currency. Speaker 2 00:21:05 Um, so there's, it, it, it, that is a dynamic which if you look at other markets around the world, really doesn't exist. Um, you tend to find, um, not in all markets, but in a lot of markets that, um, the, the, the companies are more domestically focused, um, or the investors are more domestically focused. And that's, you know, that's not necessarily a new attribute for London. That's, that's, that's always been the nature of London, but it's something that, you know, we're very proud of. It's something that we're very, um, uh, keen to ensure, uh, continues to be the case going forward. And it's, it's one of the main attractions we find with both companies and investors that are coming to sort of list their businesses, but also invest in companies that are already listed on the exchange. Speaker 1 00:21:46 Uh, just a follow up to that, Charlie, I think probably we all acknowledge the UK's more open for business now than ever before. And I, I think there'll be a lot of listeners to this podcast from the West coast and the East coast to the USA and across the companies like Trust Parlor, uh, and out in Asia. So, so what message would you give to our international listeners out there? Speaker 2 00:22:07 Well, look, I think some, one of the questions that we, uh, we sometimes get asked is, you know, why would I list a company in London? And I think, you know, what's interesting is when you do a sort of side by side comparison, um, you almost start thinking, well, why wouldn't you list a company in London if it's, if it's the right company? And by the way, we're very conscious that, you know, not every company should come to London, right? They we're, whenever we're speaking with companies, it's always, um, we're always trying to put ourselves in the, uh, sort of shoes of the company, of what, what market do we think is going to best achieve what they want to achieve? And you know, honestly, sometimes the answer isn't London and that's absolutely fine, but when you're dealing with companies that you know, are international in nature or are UK based, have pan, uh, al or sorry, have global revenue streams, you start thinking, well actually, you know, London really does have a lot, a lot to offer them. Speaker 2 00:22:53 Probably most common question we get is, shall I list my company in London? All the states, if it's a technology business, that's the most common question we get others as well. But that's the most common one. And when, again, you start doing a sort of side by side, um, of the exchanges, you start thinking, well, you know, if, if you want to access international investors, well, you look at the investor base on the LSE versus than the US exchanges, it's far more international in London. You start thinking about, well, do you want to quarterly report? That is a requirement in the us it's not in the uk we have a voluntary quarterly reporting system. You, you, you, you're required to report on an, an annual and a semi-annual basis. You know, we don't have sarbanes Oxley here, that, that doesn't exist in the uk. Um, we have a global globally respected legal and regulatory system. Speaker 2 00:23:35 Um, inclusion in indices is something that companies are more and more interested in. You're seeing this, this huge shift away from active fund management to passive fund management. So being included in an index or having the option to be included in an index in the future is something that more and more companies, uh, want to have an option on. Obviously in London we've got the FSY 100 and the Fsy two 50. And the great thing about those indices is that they are geographically agnostic to where the revenue of a company comes from. Like I say, 75% of the earnings of the 5,100 is global in nature. If you look at other markets around the world, they often require you to be a, you know, quote unquote US business or a quote unquote Chinese business are a quote unquote, whatever the, the territory is. And again, that's the sort of outward looking nature of London. It's not about are these just quote unquote UK businesses? It's, it's a, it's a global exchange, a global environment. So you start sort of putting these things side by side and you start thinking, okay, well actually there's, there's a huge amount that, um, uh, that the London market has to offer these companies. That's Speaker 1 00:24:43 Really interesting. And you're so right with the shift to passive investing. It's so attractive to be included in one of those indices. And, um, just thinking about it, sitting in the shoes as I've done, and you've spoken to lots of people of the founder, ceo, and the board, you know, and I remember actually, you know, this is a long time ago, but we, we used to, in the recruitment process with senior executives always say, you know, the I P O, when's the I P O? And it was always gonna be 18 months away, it's almost became a joke, uh, cuz you know, the time clock shifted, um, you know, from quarter to quarter. But we did it and we IPOed very successfully and it was a what's become known as a unicorn worth $2 billion. So I'm just thinking though, from a founder CEO ball point of view, and you touched a bit on this, Neil, but when is the right time to start thinking about the I P O journey and weigh it up with other, the other factors in terms of the growth and capital raise journey for the expansion of the business? What, what is the right time? Speaker 3 00:25:46 That's a really tough question to answer, Steven, because I, I think we are really fortunate today to have a markets really accessible to companies of all sizes. We see companies that, uh, may be down, um, the venture capital route of raise a series A, series B, a series G, and, uh, the common denominator for many of these companies is that they could all IPO today should they choose. Um, this is a really, um, accessible market. Founders today have more options that than ever, um, to refund their businesses. And, you know, a, a London I p o, um, it definitely stands out there, you know, take pension b um, 6 million pounds of revenue last year. We're able to list successfully onto not only our aim market should have chosen, but they, uh, decide to reopen our high growth segment, which was designed precisely for businesses like theirs where there's no, uh, lower free flight requirement of, of 10%, uh, providing a, um, have a certain size of, of float or, or, or market cap. Um, so look, we we're, we're open for business and we'd love to meet, uh, any company, um, who wants to see if this may be an option for them. Yeah, Speaker 2 00:26:54 I was just going to add, I think also, um, one of the things that makes, uh, the sort of exchange unique is that we have multiple different segments or markets. So it's not a sort of one size fits all for companies. And that's how we have the breadth that we have. If you look at the companies that have listed year to date, about 20% of them are actually sub 50 million pound market capitalizations surprises quite a lot of people. The way, and the reason that we're able to, to do that is that we don't have one market, uh, that has the same rules that apply to everyone. We have aim the world's largest growth market. Um, we have the main market which has a standard segment and a premium segment. We've got a high growth segment for companies with a revenue CAGR of more than 20%. Speaker 2 00:27:36 So the list, and there are more by the way, <laugh>. Um, so the idea has been, um, to make sure that there's an environment that can, um, uh, there's a, there's a listing segment that can provide the environment that's needed for companies to thrive almost regardless of the stage of the lifecycle that, that they're at. And, and that companies can move in between them as well. We have companies, many companies that move from aim to the main market and vice versa. We have companies that move from standard segment to the premium segment and vice versa. So it's, it's not a sort of, once you join the market, you're on that, that same market or that same segment forever. That's something that's pretty unique to London. If you look at most other markets around the world, maybe they've got one or two markets or segments, but actually you don't tend to have multiple ones. And that's also partly cuz of heritage. The LSE is now 300 years old, so these markets have grown up over a period of time, um, and we're constantly refining them as well. It, it doesn't, it doesn't sort of sit still. There's reviews going on at the moment in the UK around, um, the listing environment. And so there's potential for that to change again in the future. It's, it's constantly evolving to try to make sure that it's meeting the needs of the companies and the investors that, that, that want to transact. Speaker 3 00:28:43 Stephen. Um, there's another point that I wanted to highlight, which is companies are never stuck on our market. So if you take I I mobile, they're acquired by Cisco recently or Code Masters, which, um, were was, uh, taken out by EA recently in a bidding war with, uh, take two London. And the takeover code is designed to facilitate e m and A. We see tons of it, um, by being on our market, um, you know, companies that, you know, do want to eventually sell, uh, to a trade buyer, not prevent it from doing so. And, um, you know, frankly, what better ammunition, uh, do you have in an m and a process to be able to tell a bid that, we'll, you know, if the prices are right, we'll be able to take our company public. Yeah, Speaker 1 00:29:28 I definitely see that London Stock Exchange is just a fantastic showcase for companies out there, but, you know, I'm genuinely surprised with people like pension B has 6 million of revenues. I think there's still a perception out there and, and maybe we all do this, we celebrate the UK's hundredth unicorn in the last couple of weeks, a billion dollar company, uh, as a unicorn. And we celebrate, I think the UK market valuation of the tech sector now 600 billion. So we always kind of come out with these headline figures, but actually from what you guys are saying is there's never a bad point to start exploring, you know, what the right time is for an IPO at, at whatever revenue. And you've got a range of different market solutions that allow, you know, to fit the company as appropriate to them. Is that, is that fair to say? Speaker 2 00:30:16 Yeah, I think it is. I think also you're starting to see, um, the blurring almost of public and private lines a little bit. Um, and you're seeing this with a lot of the institutional fund managers setting up sort of what are called crossover funds so they can invest in, you know, whatever it is that the series d e f if you wanna call it that of a company. But then also they can then transition that holding into, uh, a public fund. So with that crossover side, what you're starting to see is some companies choosing to stay private and conducting the series d e f in private land, but others actually saying, well, I'll access the public markets slightly earlier, and the, the access to the public markets kind of becomes my series D, if you want to call it that. Um, so that's been really interesting to sort of see that that transition come over. Speaker 2 00:30:57 You're also seeing companies wanting to access the market in different ways. Um, you know, you've seen, um, the SPACs, um, sort of phenomenon in the States, um, uh, over, over recent months and years. The FCA is currently consulting on that, um, regime for the UK that they said they'll report early summer, but also direct listings. You know, we were extremely proud that we welcomed the first ever technology direct listing onto the London Stock Exchange, which is, um, was wise formally known as transfer wise, which we've mentioned, you know, market capitalization when it listed, it opened at 8 billion pounds, closed that day at 8.8 billion pounds. And last time I looked at it was closer to 10, you know, phenomenal success. I mean, that was a company that didn't actually need to raise any money at ipo. So again, shows a sort of third route if you like, to access the public markets where they simply admitted the shares to the market. Speaker 2 00:31:46 And so we ran a three hour opening auction for them, which basically allowed the buy orders and the sell orders time to react to one another and uncrossed at a, at a, at an orderly price in the market. So the, the stock uncrossed at 11:00 AM rather than 8:00 AM. Um, so you are, I think what you're starting to see is all of these innovative ways of companies accessing the markets, the times that they're looking to access the market. It's, it used to be quite a defined point in time. Okay, the company is quote unquote ready to ipo. You're starting to see actually that I think these, the, these things are blending. You're also starting to see a lot of companies that join the public markets and then do things, uh, you know, whether it's partnerships or investments in the public realm. You saw this with, um, you Dark Trace came to the market, then signed a, a big transaction with Microsoft as an example. Th h g I think it was, um, had an investment from SoftBank. Um, so you, again, you're starting to see, I think the, the, the blurring of these lines, which is, you know, which is, which is great to see because I think a lot of public market investors do want to get access to these stories at a slightly earlier stage. So if it's right for the companies, you know, recent history, which suggests that there's demand from investors for it. Speaker 1 00:32:55 Well, I've gotta ask you as well, Charlie, you mentioned that the, the London Stock Exchange has 300 years heritage and history, and that's built of trust and integrity and an amazing brand. But just looking forward, we've just hot off the heels of, uh, Lord Hills review, uh, the Khalifa review for FinTech. We have a Prime Minister who openly talks about the UK becoming a science and technology superpower. It's an incredibly evocative time and exciting. If you were to stargaze into the future, kind of what would it look like for both London and its accessibility and becoming a magnet for technology, uh, consumer internet companies? Speaker 2 00:33:38 I, I think it's, it's, it's a hugely exciting time because you have an environment where, uh, you know, yes, the, you've got the London Stock Exchange, but actually we're one player in a much, much sort of broader picture, if you like. And you've got a government, you've got a regulator, you've got an investment community, you've got an entire ecosystem that is focused on a sort of singular mission, which is to allow entrepreneurship to thrive and to build global businesses that can, um, uh, be founded in the uk but can also then scale in the uk. And that's, that's really, really exciting. Um, I think, uh, prospect for the country, let alone for, for the exchange itself. I think when you're then sort of boiling that down and saying, okay, well what, what tangibly then is happening, um, from the exchange perspective, you start looking at things like the Khalifa FinTech Review as an example, or the Lord Hill Listing Review, um, or the FCA consultations that are going on, the treasury consultations that are going on. Speaker 2 00:34:37 So these aren't just words, they're being backed up by live consultations where there's a very active debate going on about what is the best way to structure public markets going forward, to allow entrepreneurs to, you know, achieve their dreams, right? To, to scale their businesses, to raise the finance that they need to create the jobs, to invest in the innovation, invest in the pro in the products that they want to. And I think that's the sort of live debate that is going on at the moment. Everyone is very, very clear on what, uh, the end goal of it is. Um, and what's great to see is there's a lot of passion that's being brought to the debate at the moment, and it's just really a case of working out well, what's the best way of, of getting there? I can't think of too many more markets around the world that has that heritage of a financial ecosystem behind it and is a thriving tech sector. And you start putting the two of them together and you start looking at, well, what does that mean for the technology companies or for the technology enabled companies? You start thinking, well, there can't be too many more exciting places in the world to be right now. And I Speaker 3 00:35:36 Think this is really healthy for the entire economy, but also UK pensioners, the fact that you've got Dark Trace Trustpilot Ag and Moon Pig now in the footy two 50 and accessible to many tracker funds, um, I is, is phenomenal and long may that continue. Yeah, Speaker 1 00:35:55 And I think just looking at these companies, they're all about growth and their growth as a company gets translated to the valuation and the ascendancy of their stock price ultimately, and that that then's reflected in the industry. So, you know, I think there's so many good things to reflect on, and as you say, both Charlie and Neil, it's an incredibly exciting time for London and the tech sector. Just thinking about it in the context of, you know, what does it give me, and Neil, you touched on this earlier, uh, as a public company, what does it, what's different? What changes when you kind of flick that switch Speaker 3 00:36:32 D to day? Steven, I, I don't think that much, and you know, you, you've been there and briefed this, um, but really the difference is that there is a price on the screen should you choose to, to monitor that. And you know, we say to CEOs all the time, don't look at that stop price every minute. It's there, you know, focus on, on the long term. But you know, it, it is huge, usually helpful for a supplier or a customer to see, you know, this is a, a reputable business if it's got the financial backing to support, uh, the, the company going forward. When you are looking to hire staff or incentivize a staff you already have, um, you know, being public has so many benefits and, um, you know, I I encourage more companies to speak to advisors and see if this may be an option for them. Speaker 1 00:37:18 Yeah, I th I think I haven't sat in those shoes as well. I just think it does, it elevates your brand dramatically. You're obviously then featured, you know, whether it's the Evening Stand or Scotsman or the National Broad Chiefs, as well as social media brand elevation, and you're right, Neil, you've touched on it. All the stakeholders who you care about, your customers, your employees, your suppliers, and everybody feels a lot more comfortable and everything's much more transparent in terms of your financial results. And, and it is really a bond of trust that actually permeates into the market and could be another accelerator to your growth journey. So I think that's so true. I think final area I just want to talk about, and I, I've, I've been indulged here actually because I've come in and used the facilities of the London Stock Exchange, but again, if, if you haven't been in this amazing building, you know, what, what happens when you've done the I P O and it's results time, it's showtime and what happens in here and how do, how does it feel like, what, what services do you provide to these companies who come in at results time and what sort of facilities could they expect? Speaker 2 00:38:29 Yeah, so I mean, let's taking a step back, I guess on the day of the actual ipo, there's normally a buzz in the exchange. It's one of the things that I've sort of missed most by having to sort of work remotely over the last 18 months or so, uh, going on for 18 months. Um, so o on average, there's a company in, you know, that's just listed on the market every day, every other day. Um, and we have the management team in and the advisory, uh, team in, um, normally it's about seven 30 in the morning. It's a bit of an early start glass of champagne, orange juice, um, in the v i p room, um, getting ready to open the market and to see their shares trade for the first time. So it's a, it's a point of enormous pride. Um, normally for the management team, we then go out onto the balcony, um, and the mark, the, the management team literally opened our market and they can see a live visualization of what's going on in the market, and they can see, um, uh, their, their shares trade for the first time. Speaker 2 00:39:24 Um, and then afterwards we go back into the v i p room and we hear, um, speeches and normally the, the management team often wanna say some thank yous and, and some words of gratitude to the people who often haven't slept the night before to get, get the deal over the line. Um, that's a, a wonderful moment and it's a huge celebration, but obviously it's really just the start of a journey of being a publicly listed company at that point. Um, and after that, the services that are available from the exchange, um, uh, are plentiful. Um, so for companies that want to, um, uh, use the LSE website or almost as an extension of their own investor relations website, that facility is, is is there for them, it's London Stock Exchange is one of the most visited websites in the uk. Um, and a lot of that is investors trying to get access on the companies, uh, information on the companies that are listed on the exchange. Speaker 2 00:40:13 And then the services vary from companies that wanna live stream their results through the LSE website, would like to use the facilities within the exchange. We've got a phenomenal auditorium, which is, um, just behind where we're sitting, which you've obviously been in several times during your life as a, a publicly listed ceo, um, where whether it's annual results or capital market stays or, or whatever the event is. Um, and then we're always here to help if there's anything else that we can help with, um, that the dialogue with issuers tends to be, um, it tends to be pretty, pretty good. That's Speaker 1 00:40:43 Great. And, and speaking as someone who's used your facilities, this is kind of one of the best mission controls that I've seen in the world where you can set up on results day, your management team, uh, actually on the I P O day, you can livestream stuff to your employees, get that excitement and buzz, but we all know it's just a moment in time and the sort of treadmill of half year reporting and just delivering for all the stakeholders kind of just, it just accelerates from that moment. And, uh, you, you guys and the facilities you got provide the most professional presentation of a company to the public markets and it's, uh, very reassuring. So one final question I guess for both of you is, um, you've seen amazing momentum and we are only just in the, the middle of 2021 and the highest level of capital raising since I think it was back to 2014. What are you guys so excited about for the uk Speaker 3 00:41:39 Taking something from Wise's Direct listing? Last week was the hashtag mission unfinished, and that's r really our mission. There's so much more to do, Steven. Um, you know, today Tech probably makes up about, um, 12 15% of fund managers portfolios and re really, it ought to be about a third. So, um, uh, we look forward to welcoming, you know, many more, um, technology and consumer internet companies onto London Stock Exchange and, you know, watch the space in terms of what we'll be doing with the recent acquisition of Refinitiv, um, to provide, you know, better services to companies once they're on market in terms of data and analytics, um, our webcasting service, spark Live and, you know, just general education and information retail shareholders are highly thought of in the exchange. We're really passionate about providing fair and equal access to any investor. And it's great to see primary bid being used increasingly, um, in IPOs, but also follow on fundraisers. Now, this is incredibly born for, for companies. London's a heavily institutional market. You can have a company of a two, 300 million pound market cap that's highly tightly held by 20 or 30 shareholders, but no trading volumes because there's no retail in that. And this is an excellent solution to, to that it's really a win-win. Speaker 1 00:42:56 That's great. And Charlie, what about you? Speaker 2 00:42:58 Much like I say, much too much better than that. I, I think, um, the, the reform agenda that exists in the UK at the moment, I think has been going on for about six months now. It's, it's obviously got a way to go. Um, I think the ability to continue to tailor our markets so that, um, you know, companies are able to access the markets in a way that they want to, that helps them achieve what they want to achieve, I think is a phenomenal opportunity, um, over the next six months. So, um, we are only one part of that naturally, um, but we'll obviously be playing our, our role in that, and I think that's, that offers a hugely exciting opportunity for the future. I think also Neil's touched on gre, uh, has touched on retail. The other thing is obviously, um, also around the move to, uh, decarbonization, that's a role that, um, I think can't practically speak and happen without capital markets. And again, that's a role that, um, we think that, uh, we are very keen to play a sort of meaningful leadership role in that. Um, so that's something that we've been focused on historically and something that we're certainly gonna be focused on in the future. Speaker 1 00:43:57 That's amazing. And, you know, I've been very lucky to get to know you guys and work with you. Uh, but it's, it's also nice to see the personalities of, of you both. So we're gonna do a bit of fun and, and quickfire round to sort of wrap up with, uh, and maybe firstly, um, Neil, you know, what, what do you love to do when you're not working at the London Stock Exchange? Speaker 3 00:44:18 Steven, I've got two young boys, um, Richard, who's nine and Rien, who's five. So, uh, any moment I get, uh, play FIFA or get beaten at FIFA or kick the ball around the, the, the garden is, is what I'm usually doing when I'm not working. Speaker 2 00:44:32 Mine are slightly younger, so they're not yet playing fifa. I wish they were. So mine's normally sort of running behind them on a bike. But yeah, every, every minute that I'm not at the exchange, I tend to be trying to spend it with the, with the little ones. Speaker 1 00:44:42 That's a good thing to do. And what, what do you guys, uh, if you had to recommend kind of one book that jumps out that you read during the pandemic, what would it be? Speaker 3 00:44:51 Gosh, I, I mean, I've got free for you, I hope That's all right. That's good. Um, so Morality is a great book by the late Jonathan Sachs, um, focused on We, not I, and if we do a little bit to help each other, then we can lift each other up for us. A great read. Um, Steven Povey, um, the Seven Habits of Highly Effective People, great Reid and, um, Alex Brum, I have to give it to him on, um, the Great Rich reboot, just reminding us of all the things we take for granted as, as Brits. Speaker 1 00:45:19 That's great. Now, and Charlie, Speaker 2 00:45:21 I read, uh, recently a book by the c e o of Netflix called No Rules Rules, um, which is about creating a culture of innovation and some of the almost sort psychological experiments that went on around removing holiday policy or removing t e policy and seeing how people sort of reacted to that. And I, I thought that was, uh, I thought that was an incredibly good read. I'm not sure it'd work here, but it's an incredibly good read, <laugh>. Speaker 1 00:45:41 It's good, yes. Good to have a different perspective. Um, maybe start with you, Charlie. Well, what's the most exciting trip you've ever done? Speaker 2 00:45:49 Oh, gosh. That I've ever done. Um, so I lived in Australia for two and a half years, um, floating companies onto the ASX and raising money for companies that were listed on the asx. I'm not sure I could pick one trip, but during that two and a half years, we traveled all around Australia. Um, and it's a, as everyone knows, it's a big old country, and that takes quite some time. I think that's probably as a sort of clump of trips together. That was a pretty remarkable experience. Um, some absolutely incredible, incredible scenery Speaker 1 00:46:18 And one, one amazing landscape that sticks out. Speaker 2 00:46:22 Uh, we went to the Great Barrier Reef, which, um, was pretty, pretty spectacular, I have to say. Speaker 1 00:46:28 And what about you, Neil? Speaker 3 00:46:29 21 years ago, I was fortunate to climb to top of Kilimanjaro, um, which was just beautiful, Steve. I mean, the change in scenery as you are climbing up and coming back down was, was beautiful. And, uh, to see a, a snow cap, mountain top burnt the skin of my nose was, uh, was good fun. Great. Speaker 1 00:46:47 And, and you guys are right at the heart of arguably the greatest city in the world. What, what's your favorite London landmark? Speaker 2 00:46:55 Well, I'm gonna go really local to us and say St. Paul's Cathedral. Um, sometimes my desk overlooks the cathedral and there's days where I have to sort of pinch myself to, you know, realize, wow, okay, you actually are working, you know, right next to this and you can see it from your desk. Um, I spent a lot of time in Canary Wharf, which, um, I liked. It's, it's certainly got, it's, it's, um, you know, it's very, very functional, but I, I, I mean, working next to St. Paul's Cathedral as the LSE is based, I think is a pretty, pretty spectacular, like, I can't think of too many better locations than that. Speaker 1 00:47:24 So true. And Neil, Speaker 3 00:47:26 The St. Pauls is a beautiful place for me. I, I think it probably has to be Wembley as a football fan to be sat amongst, you know, 88, 90,000 fans, you know, watching a game. The FA Cup final is just f phenomenal. Speaker 1 00:47:41 That's good. Neil d dare I ask, who's your team? Speaker 3 00:47:44 Liverpool. Speaker 1 00:47:45 Okay, that's good. Well, hopefully they'll be back at Wembley next year. Speaker 3 00:47:49 I hope so. That's Speaker 1 00:47:50 Good. And, um, just final question, if you could have coffee or dinner with anybody living or dead, who, who would it Speaker 3 00:47:58 Be? Uh, I'm gonna have to say sorry to Mahama Gardeny, uh, I'd probably say some Michael Moritz. Um, I've been really impressed with, um, the Midas touch that he's had and being able to spot, you know, some of the best companies in tech that have emerged, be it Google or Yahoo or LinkedIn, um, o over the years. And, uh, you know, the fact that he's a a, a Welsh chap is, is even more impressive. Speaker 1 00:48:24 That's brilliant. That was good. Charlie. Speaker 2 00:48:27 I think I would have to go with Mr. Buffet actually. Um, I think someone who's been there, seen it through countless cycles, um, I think would be a sort of, yeah, a pretty unique perspective on things. Speaker 1 00:48:38 Yeah, he'd be amazing. He'd be amazing. Well, we're, you know, so privileged to listen to your experiences and sort of demystify the whole process of the initial public offering, but just final thoughts maybe for the listeners out there, maybe Charlie. Speaker 2 00:48:53 I think I, I'd just like to say, look, if there's anyone that is interested in finding out more, please do contact us. Um, our doors are always open as you know. Um, the exchange, whilst it's got a lot of security around it, um, it really is a sort of open house. We, we welcome companies in every day that are looking for information. We love meeting entrepreneurs, we love meeting founders, we love traveling the country and if not the world, um, to, to see where they're working, see what they're trying to achieve and understanding and, um, hopefully helping them achieve what they want, what they want to achieve. So if there's sort of one message I hope people are left with, it's that, you know, London's very much open for business and, and we are here to help them as, as we can. Speaker 1 00:49:31 That's brilliant. Thank you very much. Charlie Walker and Neil Shar, what, what a fabulous podcast and it's part of this incredible London's calling, the London Stock Exchange Tech i p o podcast. So tune in for other episodes and thank you guys very much for today. Speaker 2 00:49:47 Thank you for having us. Speaker 3 00:49:48 Thanks for having us, Stephen.