There’s no arguing that the UK has an abundance of tech talent. From DeepMind to Wayve, there’s a proliferation of innovation coming out of Silicon Fen, London and elsewhere in the country. Microsoft’s recent decision to open an AI hub in London is further evidence. The ostensible ‘problem’ is that we can’t manage to retain said talent, seduced by more favourable market conditions overseas – namely the US.
Take Arm, for instance. The British chip designer chose to list on the Nasdaq when it went public last year, enticed by the higher valuations, better trading volumes and greater access to capital provided by the US public market. We’ve seen it time and again, resulting in UK-listed equities now accounting for just 3.72% of the MSCI World Index (US-listed companies total 72.08%).
Those who have chosen to IPO in the UK have only served as cautionary tales. Cambridge-based cybersecurity company Darktrace, for example, had been flailing on the LSE since it listed in 2021. Its undervaluation compared to its global peers acted as a catalyst for shareholders to accept a cash acquisition of $5.32bn from American private equity firm Thoma Bravo in April. To put things into perspective, it floated – as a very sought-after entity – in the UK at 250p a share, while the agreed offer valued shares at around 620p (a 148% increase)....