Fintech Unicorns Remain Skeptical of Stamp Duty Holiday Impact on London Listings
Two of Britain's most prominent fintech companies have delivered a sobering message to Treasury officials, warning that the recently introduced three-year stamp duty holiday on shares will not be sufficient to convince them to pursue initial public offerings in London. According to exclusive information obtained by City AM, payments giant Zilch and banking software provider Thought Machine both raised significant concerns during a recent gathering of industry leaders.
Unicorn Council Meeting Reveals Persistent Concerns
The interventions occurred at last month's meeting of the so-called Unicorn Council, a group representing billion-dollar fintech companies. Both Zilch and Thought Machine, previously considered prime candidates for near-term London IPOs, expressed that the stamp duty holiday alone would not be enough to secure their commitment to list in the United Kingdom. This development represents a substantial setback for Treasury ministers who have been engaged in an ongoing battle to persuade top British fintech firms to choose London over competing financial centers like New York.
Zilch chief executive Philip Belamant, who had previously championed the company's readiness for public markets and described a potential London listing as "fantastic," now emphasizes the complexity of IPO decisions. Meanwhile, Thought Machine founder Paul Taylor, who stated in 2024 that the firm was "definitely going to IPO" and was "very keen" for that debut to occur in London, now appears more cautious about the London option.
International Investor Influence and Market Considerations
Both companies maintain substantial international investor bases, including significant American private equity backing. These investors may remain hesitant to advocate for London listings unless such moves are unequivocally in the best interests of current and future shareholders, regardless of the stamp duty incentive. The global nature of these companies' investor relationships introduces additional complexity to their listing decisions beyond domestic policy measures.
Philip Belamant commented on the Unicorn Council's purpose, stating: "The Unicorn Council was formed to create an open and honest dialogue between, and among, industry and government. While details of discussions should be private, the topics and views of the Council and its members are well documented and in the public domain. IPOs are complex and no one issue determines final decisions for any organization."
He added: "As more of the right blocks are put in place then London's potential as a listing destination increases. Dialogue in places like the Unicorn Council ensures clear and open communication to create positive momentum and achieve that outcome."
Government Efforts to Revitalize London's IPO Market
The stamp duty holiday was introduced by Chancellor Rachel Reeves during last year's Autumn Budget as part of a broader strategy to attract companies to list in London. The levy, which applies at a rate of 0.5 percent on purchases of London-listed shares, has long been criticized by market participants as among the most restrictive of its kind globally and detrimental to the health of Britain's capital markets.
Simultaneously, the London Stock Exchange and Financial Conduct Authority have implemented significant reforms to listing rules, making it easier for companies to issue capital and strengthen founders' voting rights. These changes also facilitate dual listings in London alongside other exchanges without excluding companies from FTSE 100 index eligibility.
Mixed Signals from London's Financial Markets
Despite the challenges, there have been some positive indicators for London's financial markets. The FTSE 100 index has achieved multiple record highs during early 2026, surpassing the 10,000-point milestone for the first time in its history. This performance follows a year in which the index outperformed nearly all other major global indices.
Additionally, a series of market debuts in late 2025 provided some momentum, including the successful listing of mid-sized lender Shawbrook, whose valuation has increased by more than 15 percent since its October flotation. However, for much of last year, London had fallen out of the top twenty IPO markets worldwide for the first time in history, highlighting the persistent challenges facing the exchange.
A London Stock Exchange spokeswoman stated: "The Chancellor's decision to introduce a stamp duty holiday for IPOs for three years clearly acknowledges the vital role equity markets play in driving investment, innovation, and job creation. It is also an important first step in removing the distorting effects of this duty which has historically disincentivised investment in UK companies, especially for retail investors."
Notably, there was no LSE representative present at January's Unicorn Council gathering, according to sources familiar with the meeting.
Treasury Response and Ongoing Commitment
A Treasury spokesman responded to the concerns, stating: "Our stock markets are showing signs of renewed momentum, with a number of global firms recently choosing London and the FTSE hitting record highs. We remain absolutely committed to attracting primary listings and our ambitious reforms will help double down on this by cutting red tape for firms and backing new IPOs with a three-year holiday on stamp duty taxes."
The situation highlights the complex interplay between government policy initiatives and corporate decision-making processes, particularly for globally-oriented fintech companies with diverse investor bases and multiple listing options available to them.
