In a significant blow to the City of London's ambitions, the chief executive of Revolut has publicly expressed renewed scepticism about listing the fintech giant on the London Stock Exchange.
Storonsky's Stark Warning for London
Nik Storonsky, the founder and CEO of the $26 billion-valued digital bank, stated that the company is more likely to pursue a stock market debut in the United States. His comments, made at the FT's Global Banking Summit, underscore a growing trend of major companies bypassing London for more attractive markets.
Storonsky explicitly cited the UK's regulatory environment and lower valuations as key deterrents. He argued that London's public markets suffer from a lack of specialist technology analysts and lower liquidity compared to American exchanges like Nasdaq. This, he believes, leads to a valuation discount for tech firms listing in Britain.
The Valuation and Regulatory Divide
The CEO's remarks highlight a persistent concern among fast-growing technology companies. The perception is that US investors have a deeper understanding of high-growth tech business models and are willing to assign higher premiums. Furthermore, the regulatory pathway in the UK, particularly for a complex entity like Revolut which is still awaiting a UK banking licence, is seen as a hurdle.
Revolut's situation is being closely watched as a bellwether for the UK's post-Brexit financial services appeal. The loss of such a high-profile listing would be a symbolic setback for London, which has been actively campaigning to attract and retain innovative companies.
Implications for the UK's Fintech Hub
This development raises serious questions about the competitiveness of the UK's capital markets. While the government and financial regulators have launched initiatives like the Edinburgh Reforms to boost attractiveness, comments from industry leaders like Storonsky suggest more fundamental changes may be needed.
The potential shift of Revolut's initial public offering to New York follows similar moves by other firms, such as chip designer ARM Holdings. It signals that unless London can address concerns over liquidity, research coverage, and valuation, it risks losing its next generation of homegrown champions to overseas markets.
The final decision on where to list is yet to be made, but the CEO's latest intervention makes a London IPO appear increasingly unlikely. The focus now turns to whether UK authorities can respond with compelling reforms before Revolut and others make their final choice.
