Canadian silicon chip developer Alphawave is considering listing on the London Stock Exchange despite Deliveroo's (ROO.L) stock market flop knocking tech sector confidence.
Alphawave's listing is set to be one of the most prominent to emerge from a cluster of tech firms debuting in the capital, with a valuation of at least $4.5bn (£3.3bn) after securing cornerstone backing from investors.
It plans to raise over $500m through an initial public offering (IPO), selling new shares and shares held by existing investors.
Investment management firms, BlackRock and Janus Henderson have agreed to buy $510m of shares at an equity valuation of up to $4.5bn. It will offload at least a quarter of shares as part of the proposed float.
The company predicts the market for its existing products would grow to $1.5bn in 2025 from $500m in 2020, and the market for future products would surpass $50bn by 2024.
According to the company, growth was driven by rising demand in data centres, networking and storage, with extra potential growth in 5G wireless infrastructure, artificial intelligence and autonomous vehicles.
Revenue in the year to the end of December 2020 was $32.8m — a growth of 200% year-on-year since 2018. Operating profit grew by 207% on the same basis over that time to $17.5m.
The Toronto-based company, founded in 2017, develops chip technology that pushes data through data centres and phone networks.
It will move its headquarters to the UK as part of the listing.
The company also plans to open a research and development (R&D) centre in Cambridge. Cambridge is the birthplace of many of the UK’s biggest chip companies, including Arm (ARM.F) and Infineon.
"We have chosen to come to the UK because of its incredible technology and semiconductor industry ecosystem. The strong research base in the UK – and our new R&D headquarters in Cambridge – offers an excellent foundation for the next stage of our global growth," chief executive Tony Pialis said.
Public offerings have become a hot trend in the last couple of years. IPOs jumped 85% in the first quarter of 2021, according to EY's global IPO monitor.
London's IPO market enjoyed a robust start to the year but the collapse in Deliveroo’s (ROO.L) value on admission has cast doubt on how well the capital can host tech companies.
The quarter ended on a sour note with Deliveroo's hotly-anticipated IPO.
The takeaway delivery app saw its share price crash as much as 30% on the first day of trading in the worst London listing for at least a decade. A cautionary tale for investors and firms alike, its shares continued to sink even after the initial selloff wiped millions from its value.
On Thursday, shares hit another record low after it declined 1.6% to 229p after hedge fund Odey took a short position against Deliveroo.
It has since pared back losses, trading 0.8% lower to 231p in London on Thursday afternoon.
Last week, Darktrace, a cyberscurity company with links to British intelligence services, added to the recent IPO boom in Europe after confirming its intention to float in London.
Darktrace plans to opt for a premium listing that will see its securities listed on the main market of the London Stock Exchange. The listing could value Darktrace at much as £3bn ($4.2bn), putting it in the top-end of the market.
The company uses artificial intelligence (AI) technology to spot cyber threats for businesses. Some of its clients include BT Group (BT-A.L), William Hill (WMH.L) and online shopping giant Ocado (OCDO.L)
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