London Stock Exchange to enter market for private company financing

8:32 am Tuesday, March 15th, 2022

By Huw Jones

LONDON (Reuters) – The London Stock Exchange Group (LSEG) said on Tuesday it had teamed up with digital private asset platform Floww to enter the market for unlisted companies that want to raise capital.

Britain is reforming its capital market after leaving the European Union to ensure London still attracts global investors.

The UK listings regime has already been eased in a bid to attract more technology firms to the exchange, but the finance ministry also wants to make it easier for private companies to access funds and attract more retail investors.

“LSEG will work with Floww to help launch their private primary capital raising facility, while exploring liquidity and secondary market options, including through the use of new technologies,” the exchange said in a statement.

Floww allows investors to monitor and track their investments in private companies and already features 7,000 company profiles and 70 venture capital firms.

“With LSEG, we are on course to building a connected network for all market players to share and manage their data, deals and opportunities and the ability to trade shares in companies at any stage,” Floww CEO Martijn De Wever said.

Many smaller companies have turned their backs on a public listing, citing heavy costs and regulatory requirements, according to a finance ministry consultation paper last year.

Building a bridge between private and public companies is seen as a way to build a pipeline of listings.

“By working together, we can support the widest range of companies through their funding lifecycle including helping them transition from private to public markets,” LSEG said.

“Our ambition is to be the first global exchange group that is genuinely indifferent as to whether a company is public or private, and Floww is another step in this journey,” it said.

The finance ministry said this month it was still exploring the idea for a new venue for small and medium sized companies, where trading might take place during regular but limited periods, rather than a full session every week day as on the main market.

(Reporting by Huw Jones, Editing by Louise Heavens and Edmund Blair)