Fintech IPOs: Atom Bank and Monzo have joined the chat

After a 15-month hiatus, there are preliminary signs that the IPO market may be back with a vengeance. The fintech giants seem to be warning.

Image source: TS Anil/Monzo

It’s no secret that fintech founders, investors and employees are looking for an exit.

A quick flip off Companies House showing how dozens. – if not hundreds – of people have been made paper millionaires from, for example, Revolut.

The day will come when people want it to crystallize into cold hard cash, or maybe crypto in the odd case. Nevertheless, an exit is what people want over time.

That’s what makes the lure of the much-vaunted IPO, which provides one of the easiest exit routes, so tempting.

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

However, one year after Putin’s ill-fated invasion of Ukraine, the macro environment has still stalled – or at least delayed – many fintech firms’ plans to move forward with an initial public offering (IPO).

Or has it?

I can’t be the only one who thinks things seem to be improving when it comes to market sentiment. The heady days of 2021’s risk appetite are by no means back, of course, but an end to the 2022 IPO winter looks more than possible.

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

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

One of fintech’s biggest global names Stripe has been rumored to be eyeing a public listing for years, but renewed push for an IPO timetable in the next 12 months.

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

Monzo, which just two years ago had its second instance of its auditor EY issuing a “material uncertainty” warning in its annual report, citing the bank’s ability to operate as a “going concern, is reportedly a

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

The news follows Atom Bank chief executive Mark Mullen appearing to confirm that the neobank, the first in the UK, was preparing for an IPO in London this year.

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

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

Led by WorldPay’s Ron Kalifa, one of the key recommendations was an upgrade to the UK’s listing regime to encourage more technology and growth 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 against other leading fintech hubs.

“Over the past few years, the UK has maintained its position as a world-leading fintech innovation centre, with investment in the sector outstripping other European markets.” However, several components of the Kalifa Review have not been delivered,” said.

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

At some point, and it may be sooner than anyone thought, fintech IPOs may be back on the investor menu. Let’s hope Monzo and Atom Bank choose London after Kalifa’s recommendations are finally implemented.