Tuesday 23 October 2018

Europe now 'better than US for IPOs'

Skype co-founder Niklas Zennstrom
Skype co-founder Niklas Zennstrom

Jeremy Kahn

Europe's stock exchanges now offer a more favourable environment for technology companies to list their shares than the US, Skype co-founder and venture capitalist Niklas Zennstrom has said.

Speaking to Bloomberg's Caroline Hyde at the 'Sooner Than You Think' conference in Paris, he said this was because the valuations of venture capital-backed private tech firms were more reasonable than their equivalents in the US.

In contrast, Zennstrom said, the valuations of large private tech companies in the US had been pushed up beyond the level of public company valuations, making it difficult for these firms to present share offerings without forcing some existing investors to take a loss.

Spotify, the Stockholm-based music streaming company, became Europe's second most-valued technology company when it achieved a $30bn (€25.6bn) valuation with the listing of its shares on the US Nasdaq stock market in April.

But Zennstrom said the fact Spotify chose to list in the US rather than Europe was not an indication of any problems with the public market opportunities in Europe.

"We want to see companies that become global companies and where they list may not be that important," Zennstrom said.

Zennstrom is CEO of Atomico, the London-based venture capital firm he founded after leaving Skype. (Bloomberg)

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