Europe's shrinking IPO market

Another day, another trio of serious institutions telling us Europe cannot solve its scale-up problem without first solving its capital markets problem

Source: Financing Innovative Ventures in Europe (FIVE Report) cited in How to Revive Europe’s Stock Market Listings

Europe's shrinking IPO market is the subject of a new study from the Centre for European Reform, Bertelsmann Stiftung and Jacques Delors Centre. It’s clear from their work that solutions to Europe's IPO problem start long before the mechanics of listing.

You can pretty much draw a straight line from the problems a scale-up encounters on its path to exit, to the policy fixes, and then to the EU files where those fixes can be made (most of which are currently open!).

Investors need to raise bigger funds: reform VC regulation and build bigger European fund-of-funds. (EuVECA reform and the European Investment Fund)

Scale-ups need to raise bigger rounds: unlock more pension capital and mobilise public/private growth capital. (IORP II and the Scaleup Europe Fund).

Companies need a bigger market to grow into: make it easier to build and scale one company across Europe. (EU Inc. and Single Market reform).

Scale-ups need somewhere attractive to exit: deepen and integrate European public markets. (MISP and, why not, a pan-European growth market?)

The problem diagnosis, policy solutions, and regulatory vehicles are all there. Now we're lacking political will.