New research by Pinsent Masons highlights a resurgence in the UK IPO (Initial Public Offering) market, with more companies listed in the first half of 2021 than in the entirety of 2020.


An IPO refers to the process of offering shares of a private company to institutional investors and retail investors, raising large sums of capital, and becoming listed. The process enables the company to raise capital to provide a full or partial exit to the founders, repay debts, monetise assets or improve public profile, and facilitates better access to capital in future fundraising.

Despite instincts that the UK IPO market was cooling following the disastrous IPO of Deliveroo earlier in the year, by the end of June 2021, 48 companies in the UK attained IPO status compared with 43 during the entirety of 2020 – raising more money in 2021 than for the whole of 2020.

Looking beyond the headlines reveals that the average share price gain across the firms that have made it to market this year is 24%, compared to the initial offering price. The increase in IPO activity indicates a resilient and growing post-lockdown investment appetite, perhaps reflecting pent-up investor demand after many IPO plans were put on hold in 2020 due to COVID-19.

Private equity activity in the IPO market

Recent entrants to the IPO market include Private Equity firm, Bridgepoint, which owns Burger King UK and Itsu, which is the first major listing by a UK private equity company in nearly 30 years. Its shares surged by as much as 28% in its first day of London trading as investors raced to buy shares of a rarely listed private equity firm.

The company and its owners raised £789 million in the deal, valuing the firm at £2.9 billion. Some might say the early premium suggests the stock was under-priced, but other companies have recently been criticised for short-term profiteering, or even suffered failure in the IPO process.

John Farnsworth, Head of Corporate Finance at Smith Cooper comments: “The fast food retail sector is very strong at present, and private equity is one of the most attractive asset classes. This reflects PE firms’ hoard of investable cash and the opportunity for them to acquire companies at relatively cheap valuations, especially in the UK where valuations are lower than in Europe and much lower than in the US”.

A digital focus

The most successful IPOs in 2021 have been companies led by technology, which have capitalised on the structural shifts brought about by the pandemic.

The June 21 IPO of online bathroom accessories business, Victorian Plumbing for example, is the largest company ever to list on London’s AIM market with an £850m market capitalisation and estimated 14% market share.

Other successful examples include Fintech firm, Wise, valued at £9bn, consumer review website Trustpilot, and online greeting card retailer Moonpig.

The technology trend is also reflected in the UK M&A market, where deals in the technology, media and telecoms tech (TMT) sector are dominant and rising, fuelled by companies turning to cutting edge technologies in a bid to gain long-term and sustainable competitive advantages.

What can we expect from the future IPO market?

This IPO surge in the first half of 2021 marks one of the busiest periods for London Stock Exchange IPOs in recent years.

John Farnsworth comments: “The poor reception for larger tech-related companies – like Deliveroo which slumped 35% from its listing price, and Canadian semiconductor company Alphawave which tanked by 23% – fuelled fears of a lacklustre IPO market that could discourage more tech companies, where the FTSE 100 sorely lacks depth, from following in their footsteps.”

“However, more recent IPOs and the statistics tell a more positive story; perhaps the market has learned from the failures, resulting in investors sifting through market newcomers in a more thorough and realistic manner, buying only those that meet their raised governance, business model, financial performance and valuation criteria”.

He continued: “Investor appetite is high, and the market is likely to remain an attractive one, but whether this very high level of momentum will continue throughout the second half of the year remains to be seen”.