The UK government is actively pursuing Klarna, the leading buy now, pay later company, to consider listing its shares on the London Stock Exchange (LSE) in a bid to strengthen the country’s finance industry following Brexit. Fearing that Klarna might choose to list in New York instead, ministers from the British government engaged in discussions with executives from the Swedish firm, advocating for a London listing. While Prime Minister Boris Johnson was set to attend the meeting, his involvement was impeded by prior commitments related to the Partygate scandal. Nevertheless, the meeting witnessed the participation of other senior ministers, as well as the CEO of the LSE.
The event, which saw the presence of private companies collectively valued at over $100 billion, attracted representatives from various European technology firms, including Klarna and checkout.com, a prominent payments business. Historically, the London Stock Exchange has held a commanding position in attracting global share listings. However, it has faced difficulties in enticing major tech names in recent years. Notably, companies like Farfetch and Pepco, despite being headquartered in London, opted for listings in New York and Warsaw respectively.
Among the global destinations for share listings, New York poses the greatest threat to London. In 2021, it attracted the majority share of the $92 billion generated through global listings, whereas technology companies only raised £6.6 billion in the UK during the same period. Moreover, several tech companies that chose to list in the UK encountered challenges, with their share prices plummeting after initial public offerings. Examples include THG, Deliveroo, and even non-tech firm Dr. Martens.
While most participants in the meeting were UK-based companies, securing Klarna’s listing on the LSE would be a significant coup for London. With a valuation of $45 billion, Klarna holds a prominent position within the fintech industry. Choosing London for its listing would serve as a major vote of confidence in the city’s financial sector.
Overall, the UK government’s proactive endeavors to entice Klarna and other tech companies to list on the London Stock Exchange signify a determined approach to revitalize the country’s finance industry post-Brexit. By positioning London as an appealing listing destination, the government endeavors to establish the city as a global hub for tech initial public offerings (IPOs) and attract substantial investment in the years ahead.
Useful links:
1. London Stock Exchange
2. Klarna
