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The IPOs to watch out for in 2022: Monzo, BrewDog, Burger King and more

·5-min read
Could 2022 be the year BrewDog finally does public?  (Brewdog)
Could 2022 be the year BrewDog finally does public? (Brewdog)

After a record 2021 for IPOs in the UK, when more companies went public than in the whole of 2020 and 2019 combined, eyes now turn to which businesses will join the stock market in 2022.

The Financial Conduct Authority recently relaxed listing rules in a bid to lure more tech firms to list in London rather than New York. Firms can now make as little as 10% of their shares public, down from 25%, and founders are allowed to retain stronger control of firms.

Which businesses will take advantage of the new rules? How busy does the calendar look? Will it be a whopper IPO year (Burger King UK is pressing ahead with plans to list)?

“Although the IPO pipeline for 2022 is reasonably strong, 2021 will be a hard act to follow,” says Susannah Streeter, senior investment analyst at stock broker Hargreaves Lansdown. “Appetite is likely to depend on the easing of Covid restrictions and the ongoing global economic recovery.”

Whether related to listing rule changes or not, a string of fintechs look set to consider listing this year.

The chief executive of challenger bank Zopa — which started life as a peer-to-peer lender — has named the last quarter of this year as a target time to IPO. Jaidev Janardana announced in October that Zopa had raised £220 million ahead of an IPO and earmarked London as its likely listing location.

Zopa CEO Jaidev Janardana (Zopa)
Zopa CEO Jaidev Janardana (Zopa)

Rival digital banks Monzo and Starling have also been the focus of much IPO chatter.

Streeter says: “Monzo has been dangling the prospect of an IPO over the past year, with both the CEO and COO reported as mulling the options. Its valuation has surged after winning new customers and a successful $500 million funding round.

“With 100,000 new clients joining each month and with plans to test new waters like cryptocurrencies and buy now pay later services, it may want to capitalise on the surge in interest with an IPO.”

Both Monzo and Starling have regularly insisted no listing plans have been set in motion. But Starling chief executive Anne Boden did confirm to CNBC that any IPO would probably take place in London, where the bank is headquartered.

Shawbrook Bank is also reported to be scouting out a 2022 IPO, with private equity owners BC Partners and Pollen Street Capital talking to City bankers.

Private equity firm Bridgepoint is fresh from its own IPO success in July and looking for more luck in the markets. It is said to be laying the table for a London Stock Exchange float for the UK arm of Burger King as soon as this Spring. Reports suggest it is seeking a £600 million price tag.

Burger King is said to be plotting an IPO of its UK arm (PA Wire)
Burger King is said to be plotting an IPO of its UK arm (PA Wire)

2022 could be the year when Brewdog, the UK’s biggest craft beer maker, finally comes to market. The business originally planned to list in 2020 before the pandemic hit. Its army of small investors have been waiting patiently since then.

The brewer has delayed listing before and could wait until 2023 due to not-so-cheery market conditions. When it does list, the conditions attached to the 22% stake taken by TSG equity partners are likely to disappoint some of Brewdog’s “equity punks” who are hoping to cash in.

“BrewDog will have to keep growing at industry-beating rates to justify the $2 billion valuation it is understood to be targeting at IPO,” Streeter says.

Very Group, the online fashion-to-sofa retailer owned by the billionaire Barclay family, is said to be lining up banks including Barclays, UBS and Morgan Stanley to work on a float. That could trigger a £4 billion windfall for the Barclays family, thanks to booming business for Very during the pandemic.

Lawyers are considering tapping public markets in an alternative to the traditional partnership model. Mischon de Reya, known for its elite football club clients, and Irwin Mitchell, known for personal injury cases including the Lockerbie flight bombing and coronavirus-related deaths of NHS workers, are both exploring IPOs. Another professional services business eyeing a £100 million float on AIM is job search website Adzuna in a process run by Investec.

Two very different transport firms could also be securing public listings this year: Voi and Virgin Atlantic.

When e-scooter startup Voi Technology, based in Stockholm, raised $115 million at the end of December, CEO Fredrik Hjelm said he was making “preparations to be able to go public”. He told the Financial Times Voi was still considering where to list but would probably stick to Europe. Could London be on the cards?

Meanwhile, Virgin Atlantic had been preparing for take off with Barclays and Citi reportedly working behind the scenes. The offering has faced delays, most recently due to Covid-related turbulence for all its major US-UK routes. The carrier, which is 51% owned by Sir Richard Branson through his Virgin Group , will likely wait for transatlantic travel to fully resume before flying towards a listing.

Virgin Atlantic cabin crew staff at London Heathrow Airport’s T3 (Doug Peters/PA) (PA Wire)
Virgin Atlantic cabin crew staff at London Heathrow Airport’s T3 (Doug Peters/PA) (PA Wire)

Several other businesses that delayed listings last year could also finally come to market. Roof tiling firm Marley postponed its IPO because of “market volatility”. Fuel cell firm Elcogen, commodities broker Marex Spectron, online marketplace Fruugo and miner Nord Gold all also cancelled or postponed planned IPO listings in 2021.

“Given the number of delayed listings it seems investors are more cautious and more sensitive to IPO pricing,” Streeter says.

The issues that derailed these IPOs could continue: Covid, supply chain uncertainty, Brexit repercussions, inflation and market volatility haven’t gone away. But any sustained period of market buoyancy and improvement in the Covid-19 outlook could see a flurry of firms coming to market.

Over in the US, global tech names are being talked up as possible listings this year. Broker CityIndex flags social network TikTok as a possibility, while Reddit has already started the IPO ball rolling. Fast grocery delivery firm Instacart, payments firm Stripe and Sweden’s Klarna, the buy-now, pay-later fintech, could all also go public in New York.

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