Fintech companies contemplating a move to the public markets must steer clear of the "trap" of floating too early or face potential "disaster," according to a leading London venture capital investor. The stark warning comes as the London Stock Exchange intensifies efforts to attract top UK fintechs to list domestically rather than in the United States.
The Perils of Premature Flotation
Speaking at an Innovate Finance panel discussion moderated by City AM, James Codling, managing partner at VC firm Volution, emphasised that fintechs should ensure they "get to the right place" in solidifying their business models before pursuing an initial public offering. "There is nothing wrong with companies staying private for longer... if they have access to capital," Codling stated.
He pointed to specific high-profile fintech IPOs from 2018 as cautionary tales. "They floated and it was a complete and utter disaster," Codling revealed. "So I think float when it's the right time to float. Don't fall into the trap of floating too early and then finding that the market goes, 'Oh, this business model's pretty sh*t, actually.'"
Market Recovery Challenges
The investor suggested that the fintech IPO market has struggled to recover from these early setbacks due to significant price volatility unsettling investors. "It was a real problem and I think the fintech IPO market hasn't recovered since then because [big price volatility] spooks the market," Codling explained.
He expressed support for a functioning IPO market but maintained that patience could prove beneficial. "I'd be more than happy to see our companies stay private for longer to make sure that they get to the right place before they can float."
London's Listing Ambitions
These remarks emerge as the London Stock Exchange actively courts prominent London fintechs to choose UK listings over US alternatives, aiming to rejuvenate London's public markets. Following a quiet first half of 2025, London experienced a surge of IPOs in the latter months, including tinned tuna giant Princes and private equity-backed bank Shawbrook.
Industry observers hope that leading UK fintech companies can maintain this momentum throughout 2026. Several fintech unicorns including Zilch, Zopa, Monzo, and Starling have all publicly discussed potential flotation prospects.
The Revolut Factor
However, Revolut, currently the UK's most valuable fintech by a considerable margin, has thus far downplayed the likelihood of a London listing. Instead, the company has highlighted the potential advantages of a New York listing, presenting a significant challenge to London's ambitions.
Also participating in the Innovate Finance panel, Neil Shah of LSEG commented: "We definitely want to see more companies come to market. There's so many fantastic [fintech] businesses, there's no reason why I don't believe the rest of the market won't get excited about some of these businesses."
The contrasting perspectives highlight the ongoing debate within the UK fintech sector regarding optimal timing for public listings and the competition between London and New York as preferred financial centres for technology companies seeking public market exposure.
