- Latest Tech Aim Barometer from Moore Stephens launched today
- Average enterprise value of AIM-listed tech companies reaches £123m – a record high
- Data includes a £100m secondary fundraise from Purple Bricks
Technology companies on the Alternative Investment Market (AIM) raised over £575m in the six months to June 30, 2018.
This is one of the standout findings of the latest Tech Aim Barometer from Top Ten international accountancy firm, Moore Stephens.
In the six-month period, the market saw eight IPOs, equating to £186m raised. This is a significant increase to the entire period of 2017, which through the same total of eight IPOs raised £129m. The increase in IPOs is down to “increasing values being achieved, the recent track record of successful follow-on fundraising by newly listed tech companies as well as an overall increase in the number of maturing, high quality tech companies in the UK”, says Moore Stephens Director, Dougie Hunter.
He continues: “There was a significant bounce-back in the number of tech IPOs on AIM in the second half of 2017 – and this has continued in 2018. In the first half of the year, eight tech companies floated on AIM raising an average of £24m each. Not only is the number of tech companies floating on AIM increasing, but the funds these companies are initially raising is becoming larger – showing the continued confidence in the tech sector or, perhaps, a sign of investors not wanting to miss out on the next big success.”
The average enterprise value of a technology company on AIM at 30 June 2018 was £123m – a 8.2% increase from 31 December 2017 and more than double the average value in June 2016. The increase in value over the last six months has been driven by support services (17% increase) and software (9% increase) with hardware values decreasing by 9%. This compares with the FTSE AIM All-share index increasing by 3% in the last six months and the FTSE All-Share index remaining flat.
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Moore Stephens believes the rate of increase in value of tech companies is likely to continue to slow in the second half of the year as ongoing Brexit negotiations have an impact. “Brexit will certainly cause hesitation and confusion in the market,” Hunter explains. “The long-term impact to AIM is still incredibly uncertain, but what will likely happen is a short-term dip in activity, both in IPOs and in secondary fundraises, as investors await certainty.”
It was secondary fundraises that saw the biggest capital raised in the last six months – reaching a staggering £390m in total, down from £810m in the previous six months but still the second largest level in the last three years. More than a quarter of this was raised by Purple Bricks, which raised £100m in March. The performance of the online estate agent highlights that AIM remains a strong market for the company to be a part of.
AIM also remains a truly international market too, attracting both Australian-based Maestrano and Irish company VR Education in the last six months.
“There is no doubt that these companies have been attracted to AIM as a result of the continuing increasing valuations on offer as well as the knowledge that, further down the line, they will have the ability to successfully raise secondary funds, as demonstrated by AIM tech companies raising over £1bn in the last 12 months,” said Moore Stephens’ Hunter.
Hunter concluded: “There’s no doubt that in the last 12 months AIM has been an attractive market for UK and international businesses raising capital. There is likely to be a short pause and intake of breath in the coming months with Brexit and other political turmoil. Long-term, however, we still see a strong appetite from investors and companies alike towards AIM and particularly amongst the technology sector.”