I don’t want to take too much credit about this recent story, but I’ve been spending a lot of time thinking about the IPO market in Europe, most of which was spurred by Index Ventures talking about it at their Summer Party in Paris a few months back. While people are looking for the next $1Billion startup in Europe, my thought is always “what would that startup do if it came from Europe?” The answer has always been “Sell it the US, Move to the US, or fold,” because there is no feasible IPO market in Europe.
As much as I love France, I know enough to know that France is not going to be the center of any huge tech IPO market anytime soon, it’s not in their culture. But the London Stock Exchange has great potential, and today Index Ventures announced some pretty cool stuff. They’ve been working with the UK government and the LSE to create a better environment for European startups to IPO in – lower thresholds for entering (which bring investors higher growth potential in new companies) seemed to be the main proposition:
“A lower minimum float requirement will encourage issuers to price their IPOs at levels that make them irresistible to growth-deprived investors.”
Index said that this is just the beginning of the battle, but that companies like Criteo (w00t!), Wonga and some 20-30 other European startups are ready to IPO, and I’ve heard that Criteo is considering IPO-ing outside of the US. Index warned that investors, banks, and entrepreneurs need to shape up as well, if these proposed changes are going to work. But the way I see it: this is one less excuse for European wa-ntrepreneurs to use about their startup not succeeding. For more info, check out the Index blog post.