Why another major UK company is open to IPO-ing elsewhere

One of Britain’s most valuable private companies will not necessarily choose London when it comes time for its initial public offering, its chief executive told Semafor in an interview.

The remarks by Greg Jackson — the founder and chief executive of Octopus Energy, the country’s largest electricity supplier — pile further pressure on the British capital’s premier stock exchange, which has seen a series of companies either opt to publicly list in New York or threaten to do so. And they come as Britain itself is embroiled in a general election campaign where the opposition Labour Party, which is widely expected to win the July 4 poll, has actively courted London’s financial sector to present itself as a responsible steward of the country’s economy.

“If we ever were to IPO, it’s not obvious it will be London,” Jackson said. He pointed in particular to UK funds having less money to invest than their US peers, leaving London-listed companies undervalued relative to their New York peers, and noted that investment banks in London had fewer analysts focused on companies like Octopus, which turns off potential investors.

London has for years been fighting a mostly losing battle in its global competition with New York for retaining big-name listings: Last year, the chip design firm Arm — headquartered in Cambridge, England — opted to list on the New York Stock Exchange, major companies like Flutter (which owns the gambling site FanDuel) and CRH have dropped their London listings in favor of New York, and the oil and gas giant Shell has publicly suggested it may follow suit.

Asked whether he’d consider a New York listing instead, Jackson said simply: “I can just say, it’s not obvious it would be London.”

Jackson’s remarks and the broader criticisms of London’s market paint a worrying picture for what remains one of the world’s biggest stock exchanges. Growing numbers of London-listed companies derive the majority of their revenues from outside the UK, thanks in part to Britain’s relatively open trading regime but also because of faster economic growth elsewhere. (The London Stock Exchange itself is no stranger to this desire to move stateside: Its chief operating officer will be based in New York, it announced this month.)

The timing of Jackon’s remarks are also crucial domestically: Britons go to the polls in less than a month, and while the future of the London Stock Exchange isn’t exactly a priority discussion — health care shortfalls, inflation, the prime minister leaving D-Day commemorations early, are all higher on the list — Labour has sought to refashion itself as amenable to the City, London’s finance sector, to combat arguments that as the country’s main left-wing party it will by definition heavily tax and regulate the wealthy.

Jackson did not shy away from that context: “We’ve got an election coming,” he told me, adding, “It is likely we’ll have a government with a clearer mandate than we’ve had, whoever it be. And I’d have thought, focusing on the attractiveness of London will be a high priority for any new government.”

Octopus was valued at $9 billion in a fundraising round last month, a 15% increase compared to a valuation announced just six months prior. Beyond its ostensibly vanilla energy utility, Jackson said investors place equal weight on its Kraken software platform, which is used by other utilities to manage their backend operations and customer service. Because much of the world lives in markets in which energy and water are provided by state-owned or regulated monopolies, Kraken allows Octopus Energy to sell into parts of the world where its utility arm could not normally compete. In particular, Octopus wants to sell its Kraken software in the US, which Jackson described as a “top tier” target for future sales, adding that Octopus was “in deep conversations with several significant US utilities.”

Not everyone is shying away from listing in London. The Chinese fast-fashion giant Shein is reportedly close to filing for an IPO on the London Stock Exchange, though its decision is perhaps not as much a vote of confidence in the UK as it is a reflection of growing tensions between Beijing and Washington: Shein — which was founded in China but is headquartered in Singapore — has faced criticism from lawmakers and lawsuits from rivals in the US. (Reuters reported last month that despite the bad tempers between the US and China, Shein was keeping an application alive with the Securities and Exchange Commission because it still preferred to list in New York.)

The LSE Group has also defended itself against claims it is losing the battle with New York or other exchanges: It declined to make representatives available for an interview, but in a speech last month, its chief executive insisted delistings were not a phenomenon unique to the UK, that several London-listed companies traded at higher multiples than their US counterparts, and that available liquidity was by some measures higher than in New York. Still, she said the UK needed to reform its rules on raising capital and improve the quality of research available, among other things.

Fast rising up the ranks of major stock markets is Mumbai, whose already blistering IPO pace — the nearly $4 billion raised in the first five months of the year was double that of the same period in 2023, and more than South Korea and Hong Kong combined, according to Bloomberg — could ramp up even more now that the uncertainty surrounding its weeks-long election has passed.