Europe’s public markets were dealt yet another big blow on Thursday, as UK fintech giant Wise announced plans to move its primary listing from London to the US in a bid to attract more investors.
Wise’s decision to list on the London Stock Exchange (LSE) in 2021 had been seen as something of a rare coup for the market, after a run of homegrown tech darlings turned it down in favour of a listing on the other side of the Atlantic.
Now tech leaders tell Sifted the fintech’s move not only signals to the struggles of Europe’s public markets, but could also impact already scarce late-stage funding in the region and force scaleups to consider relocation to the US earlier in their growth journeys.
“Wise shifting its primary listing to the US is not just a blow to London — it’s a signal that Europe as a whole is struggling to remain relevant in the next phase of global tech financing,” says Claire Trachet, founder of advisory firm Trachet.
“If Europe can’t offer a viable, attractive path from Series A to IPO at scale, it won’t just lose listings — it will lose its pipeline of future champions and that’s the bigger risk.”
Tech exodus
Wise had been seen as something of an outlier in European tech — a successful scaleup which had chosen to list on its home turf. When it joined the LSE in 2021 it hit a valuation of £8.75bn, the largest ever listing for a UK tech company.
“London has the infrastructure and provides great access to international capital,” CEO and cofounder Kristo Käärmann, said in an interview with the LSE at the time. “It felt like more of a natural home than the North American exchanges.”
Four years later and the tables have turned. Wise announced on Thursday that it was planning on moving its primary listing from the UK to the US — while keeping a secondary listing in London.
The company said in a statement that it believes an “addition of a primary US listing would […] bring substantial strategic and capital market benefits to Wise and our owners”.
It joins a roster of European scaleups — including Sweden’s Spotify, Romania’s software giant UiPath and Britain’s healthtech Babylon and cybersecurity firm Darktrace — that have turned their noses up at home markets in favour of the US.
Swedish buy now pay later giant Klarna is also expected to list in the US, despite delaying plans due to market turmoil caused by president Donald Trump’s trade policies. With speculation mounting over when and where UK neobank Revolut will IPO, CEO and founder Nik Storonsky said that it was “not rational” to float in London.
“No founder wants to go to the US,” Bolt founder and CEO Markus Villig told the Financial Times last month. “We’re not running away — we’re being pushed,” he said. “[CEOs] think they’d get better valuations, more liquidity, more support in the US. That’s a huge red flag.”
In 2024, IPO proceeds in the US hit $33bn — compared to just $18bn across the whole of Europe excluding the UK, according to stock market tracker MarketWatch. IPOs on the LSE in the UK were around $1bn last year.
Europe is also far more fragmented. While there are two main exchanges in the US, governed by largely similar regulatory frameworks, in Europe there are more than 30 independent exchanges.
“We should be really concerned that UK markets don’t provide enough capital firepower and support, when compared to the US, to keep companies like Wise in Europe,” says Henrik Landgren is cofounder of funding platform Gilion and former partner at EQT Ventures.
Wider impact
The fallout of Wise’s decision to shift its main listing to the US could also impact startups pre-IPO from recruiting the best talent to raising late-stage funding, founders and investors tell Sifted.
“It’s a blow, symbolically and practically,” says Nnamdi Emelifeonwu, CEO of AI legaltech Definely. “It reinforces the perception that to reach full scale Europe’s best tech firms have to look west — which could also affect where talent looks for the biggest opportunities.”
The negative market sentiment could also push late-stage investors to encourage European portfolio companies towards relocating to the US — or reduce appetite for growth stage investments in the region, he adds.
“If your path to liquidity, scale capital, and analyst coverage lies in the US, there’s a strong incentive to have leadership, go-to-market functions and investor relations rooted there too,” says Emelifeonwu. “The risk is we build the innovation here, but the upside — financial and reputational — accrues elsewhere.”
Wise’s decision to list in the US is the latest example of European-founded ideas accruing value overseas. Deliveroo was acquired by a US company in May following a listing in London — as was Darktrace late last year. UK-founded chip company Arm’s decision to list on the Nasdaq in 2023 was widely considered a big blow to London by investors.
“VCs fund growth with the expectation of clear exits,” says Carrie Osman, CEO and founder of growth agency Cruxy. “If public markets don’t provide that, the incentive to back scaleups weakens. This doesn’t mean VCs will vanish — but growth capital will get more selective and valuations may compress.”
Are regulators doing enough?
There are signs that regulators in Europe are waking up to problems its public markets face.
In 2024, the UK’s Financial Conduct Authority (FCA) relaxed listing rules for companies earlier this year (though it may take some time to actually work its way through the ecosystem).
Towards the end of last year, the EU adopted an act to make it easier for companies to float on home stock markets by reducing some administrative burdens and costs.
Industry leaders say more could be done. Some investors in the UK point to stamp duty on the purchase of shares holding back the market and hampering liquidity. In March, Swedish prime minister Ulf Kristersson publicly called on the EU to address the fact that European tech companies are choosing the US over Europe when going public.
While there was some hope in Europe that the US’s turbulent economic climate could benefit public markets on this side of the Atlantic, that seems to be dissipating.
“The question for companies like ours is: where do we believe the best long-term value, for the business and for shareholders, can be realised?” says Lee Holmes, CEO of trading brokerage Infinox.
“The UK and Europe need to make that answer clearer and more compelling.”
Read the orginal article: https://sifted.eu/articles/european-public-markets-no-go/
