Setting Precedents On The London Stock Exchange

The big news in London’s technology sector this week was the floatation on the London Stock Exchange of cyber security firm Sophos.  The listing which raised £125 million pounds and in the process created Europe’s latest unicorn with an initial market cap of over £1 billion pounds. 

However, the greater significance was that firm chose to list on the London Stock Exchange versus the more conventional route for technology firms (such as King –London based creators of Candy Crush) to list in the United States on NASDAQ or the NYSE.  The Sophos listing was largest software IPO in London Stock Exchange history and one of the largest technology IPO’s in the UK ever.

In my view this is really important for London as a technology hub, as IPOs help create the ecosystems for technology companies to thrive - the lawyers, accountants, fund managers, investment bankers and stock analysts that are all necessary to support publicly traded technology firms.  Companies tend to list where they feel investors have the best grasp of their business. And a London listing makes it more likely the company will stay headquartered here and not move to the sunnier climate of Silicon Valley.  Whether the Sophos listing will help turn the tide back towards London, it’s too early to tell but it’s a start. 


By Ashok Parekh, Director of Investment Services