Fintech IPOs: Atom Bank and Monzo have entered the chat

After a 15-month hiatus, there are tentative signs the IPO market could be back with vengeance. Fintech giants appear to be paying notice.

It is no secret that fintech founders, investors and staff members are looking for an exit.

A quick scroll of Companies House shows how dozens. - if not hundreds - of people have been made paper millionaires from Revolut, for example. 

The day comes when people want that to be crystallised into cold hard cash, or perhaps crypto in the odd case. Nonetheless, an exit is what people want over time.

That makes the lure of the much-vaunted stock market listing, which provides one of the easiest exit routes, so tantalising. 

The only issue is the broader market environment which turned sour in 2022.

One year on from Putin’s vicious invasion of Ukraine, however, the macro environment has still put a halt - or at least a delay - on many fintech firms' plans to go forward with an Initial Public Offering (IPO). 

Or has it?

I can’t be the only one to think things seem to be tentatively improving in terms of market sentiment. The heady days of 2021’s risk appetite are by no means back, obviously, but an end to the 2022 IPO Winter looks more than possible. 

Last week, a report from Reuters suggested the market has seen the best week for IPOs in 15 months. 

This follows a bullish start to the year for the stock market, evidenced by the AltFi Fintech Index’s 20.7 per cent return in the month.

One of fintech’s biggest global names Stripe has been rumoured to be looking at a public listing for years but a renewed push for an IPO timetable over the next 12 months.

Some of the UK’s fintech giants appear to be paying notice too.

Monzo, which only two years ago had its second instance of its auditor EY stating a  ‘material uncertainty” warning in its annual report, in reference to the bank’s ability to operate as a ‘going concern, is reportedly one. 

The UK neobank, riding high from a strong 2022 and aiming for profitability in 2023, is having early discussions 

The news follows Atom Bank’s CEO Mark Mullen appearing to confirm the neobank, the first in the UK, was gearing up for a London listing this year. 

“We are focused on putting the bank in a position where we can list and our assumption, our plan, is to do so in the UK, in London,” Mullen said in an interview with City A.M.

Since the first wave of fintech IPOs another anniversary is about to occur: the second year since the publication of the Kalifa Review. 

Led by WorldPay’s Ron Kalifa, one of its central recommendations was for an upgrade to the UK’s IPO regime to encourage more tech and growth-stage companies to list in London.

Yoko Spirig, co-founder and CEO of Swiss fintech Ledgy, notes that the Kalifa Review encourages the UK to sharpen its competitive edge over other leading fintech hubs.

“Over the last few years, the UK has held on to its position as a world-leading fintech innovation hub, with investment in the sector outpacing other European markets.“However, several components of the Kalifa Review have not been delivered,” she said. 

“The London stock exchange is not yet seen as a top-tier destination for tech listings, and the UK is still missing a fully operational crypto regulatory regime as recommended by Kalifa. Other fintech hubs like Berlin and Paris are building talent and investment capacity all the time, so the UK cannot be complacent,” she added.

At some point, and it may be sooner than everyone thought, fintech IPOs may be back on the investor menu. Let’s hope Monzo and Atom Bank pick London following Kalifa's recommendations finally being implemented.