London: The New Favorite IPO Destination for Latin American Startups

In recent years, the London Stock Exchange has emerged as an increasingly attractive destination for tech and internet startups from the Americas, including those from Latin America. Since 2017, there has been a significant increase in the number of companies from the region choosing London for their initial public offerings (IPOs). But what’s driving this trend, and what concrete benefits does this choice offer for Latin American startups?

Sustained Growth in Listings from the Americas

Since early 2017, more than 72 companies from the Americas have opted to list in London, averaging 16 listings per year. This impressive growth is no coincidence. Companies like tinyBuild GAMES, Alphawave IP Group, and Trellus Health have demonstrated London’s appeal for startups with high growth ambitions.

Jonathan Nelson, Director of HF Capital, explains that choosing a London IPO is a winning strategy for startups, especially in emerging markets like Latin America. HF Capital has played a critical role in guiding startups through this process, saving executive teams hundreds of hours and millions in legal, accounting, and listing fees. Additionally, HF Capital has built relationships with 28 stock exchanges and even advised the U.S. Securities and Exchange Commission (SEC) on capital access for small businesses.

Why Choose London?

Several compelling reasons make the London Stock Exchange an ideal destination for LATAM startups:

More Accessible Costs and Processes: IPOs in the United States can be prohibitively expensive, ranging from $10 million to $60 million. London, on the other hand, offers a more cost-effective structure, enabling startups to access capital without needing to be tech giants or “unicorns.”

Attractive Valuations and Access to Sophisticated Investors: Investors in London understand technology and innovation just as well as their U.S. counterparts. This translates to favorable valuations and the opportunity to attract both local and global investors willing to back promising companies.

International Relevance: Many LATAM startups aim to expand their reach and position themselves in global markets. London is not only a top-tier financial hub but also provides access to a vast network of bankers, analysts, and PR experts who understand the unique needs of tech companies.

Sector Diversity: London’s success in attracting listings isn’t limited to a single industry. The Exchange has seen a steady stream of IPOs in technology, healthcare, biotech, energy, renewables, and mining, creating a fertile environment for startups across various sectors.

A Success Pathway for LATAM Startups

Latin American startups face unique challenges when it comes to securing growth capital. However, as Nelson points out, accessing growth markets like AIM in London can make a substantial difference. London not only offers the chance to reach global investors but also helps startups sidestep the barriers and high costs often associated with other markets. Furthermore, the process of listing in London is more streamlined and offers benefits that many startup CEOs and CFOs are not yet aware of.

The trend of listing in London is set to continue as more LATAM startups discover the advantages of this market. Whether it’s competitive valuations, access to a global investor base, or efficient processes, the London Stock Exchange is increasingly positioned as a premier option for companies ready to take the next big step in their growth journey.