FinTech reportedly planning U.K. listing

The London-based firm is reportedly working with investment bankers from Goldman Sachs on the planned $2.5 billion IPO

Santander-owned payments FinTech Ebury is reportedly planning to go public in the U.K.

The London-based firm is working with investment bankers from Goldman Sachs on the planned $2.5 billion IPO, the Financial Times reported Sunday, citing sources familiar with the matter.

The FT noted that Ebury’s choice to go public in the U.K. is a “rare vote of confidence” for the London Stock Exchange (LSE) amid a listing drought. Many firms have expressed interest in going public, but rocky markets and high interest rates have scared off investors.

The report also points to last year’s listing of rival FinTech CAB Payments, whose shares dropped more than 70% after its initial public offering. At the same time, the FT said, some FinTechs are choosing to list in New York, such as Klarna, which is reportedly readying an American IPO for next year.

Other firms are showing more caution about listing, such as StubHub, which recently put its IPO on hold.

In May, the Chief Executive Officer of Swedish FinTech Trustly said an IPO was not yet on the firm’s radar, in spite of demonstrating strong financials, because it has to sell its business model to investors before it can think about a public listing.

We need another year or two to really to demonstrate to the market that open banking is happening, it is here, Trustly CEO Johan Tjarnberg said at the time.

However, a report by Goldman Sachs from earlier this year argued that 2024 could mark a turnaround for the IPO market, with its IPO Issuance Barometer increasing to its highest level in two years at that time.

We expect the U.S. economy will continue to grow, the nominal 2-year UST yield will drop modestly, and valuations will remain higher relative to history, Goldman Sachs strategists wrote. If soft data improves to match the hard economic data and equity investor pricing of economic growth, it could lead to a further rise in our IPO Issuance Barometer in coming months.