London Stock Exchange enters private corporate finance market

FILE PHOTO: Signs can be seen outside the entrance to the London Stock Exchange in London, UK. August 23, 2018. REUTERS/Peter Nicholls

March 15, 2022

By Huw Jones

LONDON (Reuters) – The London Stock Exchange Group (LSEG) announced on Tuesday that it has partnered with digital private asset platform Floww to enter the market for unlisted companies looking to raise capital.

The UK is reforming its capital market after leaving the European Union to ensure London continues to attract global investors.

The UK’s listing regime has already been eased to attract more tech companies to the stock market, but the Treasury also wants to give private companies easier access to finance and attract more retail investors.

“LSEG will work with Floww to support the launch of 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 enables investors to monitor and track their investments in private companies and already has over 7,000 company profiles and 70 venture capital firms.

“With LSEG we are on the way to build a connected network for all market participants to share and manage their data, business and opportunity and the ability to trade shares of companies at every stage,” said Martijn De Wever, CEO of Floww.

According to a Treasury Department consultation paper last year, many smaller companies have turned their backs on listing, citing high costs and regulatory requirements.

Bridging private and public companies is seen as an opportunity to build a pipeline of public listings.

“By working together, we are able to support a diverse range of companies throughout their financing lifecycle, including assisting in the transition from private to public markets,” said LSEG.

“Our goal is to be the first global exchange group that truly doesn’t care if a company is public or private, and Floww is another step in that journey,” it said.

The Treasury said this month it was still exploring the idea for a new venue for small and medium-sized businesses, where trading could take place in regular but limited periods, rather than a full session every weekday like the main market.

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