Fintech IPO Duel: London vs New York – Which City Secures the Upper Hand in the Initial Public Offering Race?
Financial heavyweight Rachel Reeves has set her sights on luring Britain's leading fintech companies to London's stock market, as she battles to secure high-profile initial public offerings (IPOs) and outshine New York's robust fintech sector.
To boost listings on the London Stock Exchange (LSE), Chancellor of the Exchequer Rishi Sunak has been courting top fintech firms, hoping to attract a fleet of companies eyeing fledgling public offerings. Monzo is reportedly consulting with investment bankers for a potential £6 billion listing, while Starling Bank has begun recruiting for a role aimed at securing a successful IPO.
After the LSE suffered an exodus of 88 firms in 2024 – its biggest since the 2008 financial crisis – fintech firms could prove to be the beleaguered market's saving grace, provided they can outperform their transatlantic rival.
The US market's allure has faded, with President Donald Trump's tariff announcements causing chaos in global markets and leaving the US Nasdaq Exchange – host to tech titans like Apple, Tesla, and Microsoft – reeling with significant losses. This turbulence has placed renewed attention on London's financial markets, offering them an opportunity to capitalize on the Big Apple's decline.
According to Julian Morse, co-CEO of Cavendish, the UK's success hinges on addressing productivity issues and implementing pension reforms, which could lead to increased investment in British stocks and an eventual boost for the stock market. However, fintech companies may demand more tangible advances before altering their IPO plans.
In an unexpected twist, Buy Now, Pay Later pioneer Klarna, which reported a doubling of losses in the first quarter, had initially planned a New York listing. The delay in these plans dealt a blow to London, which had hoped to secure a listing following Klarna's establishment of a British holding company in 2023.
The US, with its vast capital and brand power, poses a significant threat to the UK market, as it attracts fintech unicorns and international firms seeking to float. High-profile fintech veterans such as Nik Storonsky and Jack Zhang have already expressed their intentions to list in the US, citing liquidity and loosened regulations as advantages.
Airwallex, the Australian-born payments platform, hotly tipped for a future IPO, has made it clear that London is not part of its plans, despite the UK's efforts to simplify listing rules and reduce regulatory burdens.
London's ability to compete with New York in the fintech IPO landscape depends on its willingness to reconsider the traditional definition of a public offering, according to Matt Cooper, head of Crowdcube. As such, the Financial Conduct Authority has proposed plans to expand access to equity and bond markets for retail investors by launching a Public Offer Platform (POP) in 2026.
James Baston-Pitt, Alloy's head of growth for UK, EMEA, and APAC, emphasized the importance of London maintaining its open dialogue between fintechs, regulators, and government policy makers. London has hosted several fintech IPOs since 2010, but recent listings have suffered mixed results.
As reported by City AM, the government is considering the launch of a new type of private market for unlisted securities, known as Pisces. This private stock market, regulated by the Financial Conduct Authority, will enable growing companies to raise capital without the pressure of a full public listing. Once they have built the capital structure needed for a float, Pisces companies may choose to pursue a London IPO.
While the battle for fintech listings is sure to heat up, Morse sees benefit in forging partnerships between markets through dual listings or collaborative initiatives. As Reeves strives to fulfill her promise to create a favorable environment for fintech listings, the UK's success in competing with New York remains to be seen.
Fintech companies in Britain, such as Monzo and Starling Bank, are considering listing on the London Stock Exchange, potentially boosting the market's performance. The allure of the US market has diminished due to economic turbulence, offering a chance for London's financial market to capitalize on the decline.However, attracting fintech unicorns and international firms will require addressing productivity issues and implementing pension reforms, as well as reconsidering the traditional definition of a public offering. The Financial Conduct Authority is planning to launch a Public Offer Platform in 2026 to make it easier for retail investors to access equity and bond markets, potentially enticing fintech firms to choose London for their IPOs. Partnerships between markets through dual listings or collaborative initiatives could also benefit both the UK and New York's fintech sectors.
