Perception vs reality: The UK vs US IPO debate

If you’re a founder or executive of a UK company considering an IPO, the narrative that New York is the best place to raise serious capital is hard to ignore. Headlines in the UK media regularly declare “another blow” to the London Stock Exchange as high-profile companies opt for US listings.

With success stories like £112bn market-cap ARM Holdings PLC—whose share price has risen over 75% since its NASDAQ listing in 2023—the appeal of the US is understandable. However, a recent 20VC podcast featuring Julia Hoggett, CEO of LSEG, challenged this perception. While you’d expect the CEO of the exchange to champion London, her insights offered a compelling reality check.

She pointed out that over the past decade, only 20 UK companies that have listed in the US have raised over £100m. Of those, nine have already de-listed, four are trading up, and the rest have seen their share prices fall by more than 80%. Based on this, the assumption that a US listing guarantees success simply doesn’t hold up.

For smaller companies, the reality is even tougher. Unless they make it into a major index—where 60% of US market capital is concentrated—they risk being overlooked. The US is dominated by domestic investors, who typically prefer well-known companies and brand names. Even mid-sized companies struggle to gain traction as investor attention is overwhelmingly focused on the biggest players.

London, by contrast, offers real advantages. Companies meeting index thresholds, such as the FTSE, can gain inclusion in a matter of days, providing immediate liquidity. International investors already hold 60% of UK-listed shares, meaning the same capital that backs US companies is just as accessible here. While Julia acknowledges why some companies perceive the US as the better option, the reality is that strong UK businesses with a compelling story can access deep pools of investment capital more efficiently via a UK listing, with lower costs and fewer regulatory barriers.

While reforming tax policies, consolidating pension funds to encourage investment in UK companies, and incentivising high-quality research have all been put forward as ways to improve the UK markets, shifting the perception from the US to the UK as a great place to float is paramount in encouraging more UK listings. London has the foundations to be the first choice for ambitious UK businesses — it’s time we start doing more to promote it in this light.