Building Momentum: Why The UK’s IPO Market Is Primed For Recovery

Given the lack of listings over the past few years, you could be forgiven for thinking that London's IPO market might never awake from its slumber. But that picture is changing.

Over the past 18 months, a steady stream of smaller deals has returned to market, signalling improving confidence among companies and investors alike.

More significantly, a substantial pipeline of larger transactions, with companies in the £2–20bn valuation range actively preparing for market, is building behind the scenes.

From Slowdown to Stabilisation

Global IPO volumes grew last year, but they are yet to recover their previous highs. While the slowdown has been global in nature, the UK’s recovery continues to lag that of other major IPO centres.

Much has also been made of the idea that homegrown UK companies are abandoning their home market to list in the US. However, we think that narrative is overstated.

What we are seeing is companies selecting the exchange to list on based on their sector and investor base. For example, arguably it makes sense at the moment for a technology firm to be listed in the US, given it is the global leader in this sector.

But UK companies with strong fundamentals and a compelling equity story are not abandoning London. They are waiting for optimal conditions to access it.

The recent overhaul of the UK listing regime has also brought London into line with – and in some respects ahead of – other global financial markets. It means companies are no longer having to seek European or US listings to achieve their ambitions, with the UK now attracting companies from all sectors and all jurisdictions.

Delayed, Not Cancelled

As a result, there is currently a large and growing list of firms – many of them household names – linked with potential UK listings, including Loveholidays, business software provider Visma, Superdrug parent AS Watson, neobank Monzo and, of course, Revolut, the UK fintech hoping to achieve a valuation of around £149bn ($200bn).

Each of these represents a resounding vote of confidence in London as a listings destination and suggests that the UK has a pool of capital large enough to support exciting growth companies. At the same time, the rising use of retail participation platforms such as RetailBook points further to the depth of anticipated investor demand.

The combination of a growing backlog of IPO-ready firms and strong investor appetite for new listings points to a meaningful uplift in activity as conditions stabilise.

EQ has been in dialogue with many of these companies and their advisers to support their listing requirements. We are seeing more companies come to market requiring solutions that allow early investors, senior management and the wider employee workforce to realise value from an IPO.

We have a complete range of solutions to support this – and we would suggest speaking to us at the earliest opportunity.

Shifting Expectations

More broadly, investor focus has shifted decisively towards proven profitability, scalable business models and clear earnings visibility. Technology companies where valuations and margins remain under pressure face greater scrutiny, but those with a credible path to profitability or with a compelling narrative continue to attract interest.

The recent SpaceX IPO demonstrated that when the right company comes to market, capital mobilises fast, with UK-based investment platforms reporting surging demand for the stock.

While deals of that magnitude drain market liquidity, demand for that particular IPO reveals appetite among UK-based institutional and retail investors for the right opportunity.

There are also questions about how long the AI-driven enthusiasm inflating US tech valuations can hold. If sentiment turns – and the cracks are appearing – the capital anchored to Wall Street's AI story will need somewhere else to go. A reformed London market, offering exposure to fundamentally sound businesses outside the bubble, is well placed to receive it.

It also helps that equity markets are taking heightened geopolitical uncertainty in their stride. Year to date, the FTSE 100 is up 5.43%, which is impressive, given the increased geopolitical uncertainty of recent months. That relative stability will give companies sitting on the sidelines greater confidence to make the move to public markets.

However, for those that do, be prepared with your investor story. Don’t give analysts the opportunity to own the narrative. If you’re struggling with that, talk to us. We can support companies to manage their investor communications.

A Market Defined by Quality

The IPO market is entering a new phase, one defined less by volume and more by quality. Valuation expectations have reset across sectors, creating a healthier and more sustainable environment for listings.

Uncertainty has introduced caution, but it has not frozen the market. Companies with strong fundamentals and resilient business models are still finding their way to market – and London, with its reformed listing regime, deepening investor base and growing roster of IPO-ready names, is well placed to lead that recovery.

The backlog is building. Conditions are improving. And for the UK’s IPO market, recovery is in sight.