Nasdaq Nordics overtakes London as Europe’s dominant exchange for IPO volume and value

Image courtesy of Nasdaq from Tobii's IPO Image courtesy of Nasdaq from Tobii’s IPO

As someone who has long championed the Nordics’ ability to produce valuable world class companies, even I was taken back by the findings of PWC’s IPO Watch report last week.

In the first half of 2016, Nasdaq OMX (Nordics) recorded more IPOs in terms of volume and value than London’s, replacing it as Europe’s dominant exchange.

And the best news? Technology companies were one of the primary catalysts for this.

Since the beginning of 2015, there have been 17 (plus one*) Nordic technology floats:

  • Evolution Gaming Group AB
  • Tobii AB
  • Invisio Communications AB
  • Gaming Corps AB
  • Collector AB
  • SolTech Energy Sweden AB
  • Footway Group AB
  • CLX Communications AB
  • Waystream Holding AB
  • TC TECH Sweden AB
  • Stillfront Group AB
  • Catena Media P.L.C
  • LeoVegas AB
  • Cleantech Invest
  • Nepa AB
  • TalkPools AG* (Based in Switzerland, Swedish founders)
  • Clean Motion AB
  • Paradox Interactive AB

I caught up with Adam Kostyál, Senior Vice President of Nasdaq to get his insight on this.

Why do you think think the Nordics have had such a strong 2016?

AK: There are a number of possible explanations for this. In addition to low interest rates and a beneficial macro-economic environment, the mix of international, institutional and retail flow in the Nordics make Nasdaq Nordic attractive for companies of many different sizes.

Whilst the Nordic markets have stayed strong, the US markets have been slower. However we expect these to pick up in the end of the 3rd quarter and 4th quarter. I have 150 European companies, mostly from the Tech sector, that are either primary or dual listed in the US. As we see the US markets pick up it is great to see that the Nordic markets have stayed strong and continue to attract more and more entrepreneurial companies.

Another explanation to the strong inflow in the Nordics is that you also have the visibility and credibility that comes with being a public company. This seal of quality is something that companies are looking for, and something that can really help them as they are looking to expand internationally.

The Nordics, in particular Stockholm, is also a part of a well-functioning ecosystem of financial advisors and investors supporting younger companies as they grow. We have advisors working exclusively with SMEs and a market where both institutional and retail investors are willing to invest in these companies – and I think all of this explains the strong inflow of new listings.

Is this level of volume and value sustainable?

AK: We have a solid Nordic pipeline with a number of new listings expected in the end of Q3 and during Q4. The IPO climate is always dependent on the macro economic environment, but if the current environment remains resilient we expect the inflow to continue.

Furthermore, The Nordic economies are stable, affluent and resilient, meaning a beneficial environment for both issuers and investors. The Nordic startup scene and the eco system around SMEs is fairly unique, especially when you look at Stockholm. The Nordic countries really are a hub for growth companies looking to raise capital and expand their business.

What about outside of Stockholm? Do you expect to see growth in these markets as well?

We do see a few differences at a local level. While both Helsinki and especially Stockholm have seen an exceptional inflow of small and mid-sized companies, Copenhagen has showed its large cap listing capabilities several times in recent years. The most recent example is the DONG Energy IPO in June – the world’s largest IPO this year measured in market capitalisation.

While Stockholm is expected to be the continued driver in terms of Nordic IPOs, we are constantly trying to improve our listings offering across the Nordics. What’s also interesting to note is that we are seeing an increased interest from international companies looking to list with us in the Nordics. The most recent example is UK/Singapore based The Marketing Group, a company that listed on Nasdaq First North in June this year. I think there is definitely room to further position Nasdaq First North internationally.

I am also responsible for helping European companies list with Nasdaq in the US. Despite a fairly slow year for IPOs in the US, we are now seeing an increased appetite from European tech companies going to the US.

One of the most controversial pieces we’ve ever published on The Nordic Web was our prediction that the Nordics would overtake London within the next few years for raising capital, now, while that remains to be seen, one thing’s for sure, the Nordics are ready right now to give London a run for their money when it comes to their companies going public.

“In the tech world, things move fast and companies are born anywhere in the world. I’m able to have an ear to the ground with The Nordic Web – the content is fresh, local, and of high quality, which is exactly what you need as a seed investor.

In fact, it’s through Neil Murray’s newsletter that I first heard about Mapillary. Several months later, I was fortunate to lead our firm’s investment in the Company to help drive the creation of a crowdsourced visual representation of our world”

— Nathan Benaich, Playfair Capital

Neil S W Murray founded The Nordic Web in 2014 in order to provide the Nordics with the quality coverage it deserves. As well as being Founding Editor of The Nordic Web, Neil is also an active community builder in the region, participating in a number of initiatives, and has previously worked for