Thought Machine ponders IPO as VCs advise against listing  

The London-based fintech could follow the high-profile flotation of chip designer Arm

Fintech Thought Machine has said it is in the early stages of a London IPO – a move which it is hoped could spark life into the listings market.

The London-based start-up, which uses the cloud to help banks with their technology needs, was founded in 2014 and has raised £490m since its inception according to Pitchbook. In its last funding round in May 2022, the business was valued at £2.2bn.

However, VC firms in the US are advising start-ups to hold off from listing for now, after the Federal Reserve’s stated support of increased interest rates led to a less than impressive float by chip designer Arm and other high-profile IPOs. The SoftBank-backed firm ended the month 5 per cent above its listing price and saw clients Nvidia and Apple take up shares.

“In our portfolio we would advise: unless you really need to, hold back,” Mike Volpi, partner at Index Ventures told the Financial Times. “The market has been rough in the past few weeks… Unless you need to go out, I’d wait until the second half of next year.”

According to Pitchbook, there is now an estimated backlog of almost 80 IPO candidates in the US. 

September saw around 25 companies IPO in the US and Europe and the high-profile flotations such as Arm, marketing automation start-up Klaviyo and grocery delivery company Instacart are being monitored closely after a lengthy period of inaction.

“We’re definitely seeing a bit of a soft open in the IPO market”, Lizzie Reed, global head of the ECM syndicate desk at Goldman Sachs told Reuters. “The last cohort of IPOs … provided a case study for issuers who might be contemplating markets access.”

More on listing

Benefits of IPO for a companyBenefits include the ability to raise millions of pounds while elevating your company’s profile significantly

Here’s how you undertake an IPO in the UK in the best wayFloating your company on the stock market is a complex process, but get it right and it’ll pay dividends

Dom Walbanke

Dom Walbanke

Dom is a feature writer for Growth Business and Small Business, focused on matters concerning start-ups and scale-ups. He has also been published in the Independent, FourFourTwo magazine and various lifestyle...

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