Europe's IPO reform agenda has been in motion for more than two years and despite listing requirements being relaxed, growth companies across all sectors continue to choose private capital over raising capital from the public markets.

A growth company raising £100 million in 2026 will look first to attract a specialist European or American PE investor, often as part of a structured round with secondary liquidity for early-stage investors. The IPO route still looks slower and more onerous with no apparent uplift on valuation over PE backed transactions.

We wrote in September last year about the UK's efforts to revive its IPO market. However, London raised less capital in the first half of 2025 than at any point in the last thirty years. Absent a structural shift in liquidity and valuation, the equity capital markets route remains an option primarily for later stage businesses rather than for small and mid-market growth companies.

For mid-market sellers, this changes the exit horizon. Assets that would have listed between 2024 and 2026 are still in private ownership, with PE houses now working towards an M&A exit rather than an exit through a listing. The buyer universe includes more PE-to-PE transactions and more strategic led exits than the dual-track processes of looking simultaneously at seeking an exit through both the private and public markets which was common a decade ago.

For founders considering a major capital raise, PE capital is faster to close, usually produces a higher near-term valuation and generally gives founders an investment partner who provides support and understands the issues that growth companies face in achieving their goals, rather than focusing on short term share price movements.

#CorporateFinance #PrivateEquity #Growth