Some 23% of UK technology entrepreneurs are pursuing an AIM listing as their planned exit strategy, according to new research released by Nabarro, an international law firm.
Although 82% of tech entrepreneurs agreed or strongly agreed that the AIM market is a natural fit for fast-growing UK technology companies, some 48% preferred to list on other markets.
In contrast, 21% said they preferred to be acquired by a bigger tech company. The reluctance to list on AIM, the research added, signalled foudners’ desire to wait for a “bigger, more ambitious exit further down the line”.
Alasdair Steele, Corporate partner at Nabarro, said: “Our research shows there is an appetite for investment across the tech industry, but lack of awareness of the benefits of an IPO on AIM could be stunting growth in the sector.
“Businesses need to consider floating on AIM as a stepping stone to raise capital and profile, rather than focusing solely on the London Stock Exchange’s main market, or pinning their hopes on a trade sale to one of the ‘Big Five’ technology brands, ” concluded Steele.
The reasons
Some 38% of those surveyed said the would consider AIM as their exit strategy because it would realise value for some of their stock.
Others, 31% of participants, said they would list because this would give them access to capital markets.
Being able to grow more quickly was cited by 14% of those surveyed.
The two biggest fears expressed by those surveyed were increased regulation (56%) and loss of control (22%).
Areas of interest
The report also looked specifically at FinTech and Medtech as potentially vibrant areas across the UK technology market.
Some 37% of investors said they saw Medtech as the most attractive AIM investment opportunity over the next 12-18 months.
FinTech and Insurance Tech was favoured by 27%.
Guy Heath, partner and head of Technology at Nabarro,concluded:
“Investor demand for AIM technology stocks is high, and set to increase over the next five years. If the ambitions of founders meet the increasing appetite of investors for tech stocks, then AIM could become a breeding ground for a new generation of UK and European unicorns.”