When IPO markets fully open again, many of Europe’s scaleups won’t be rushing to list, Goldman Sachs bankers tell Sifted.
Clif Marriott, partner and co-head of European tech investment banking at Goldman Sachs, says the average company today is staying private for longer and seeking to grow bigger in the meantime.
“Founders have access to private capital for a much longer period of time and in much higher volumes, and so they don’t see the IPO as a funding mechanism anymore; they see it more as an enablement of liquidity for their core investors.”
The bar is also higher for public market investors — especially in the US. The average company going public today is valued in the $5-10bn range, compared to $1-2bn a decade ago, says Marriott.
Markets are interested in large, high-growth global platforms like Revolut or Vinted — and there aren’t all that many European scaleups that meet that criteria.
“I think there has been a flight to quality, flight to scale, flight to growth in the late-stage market,” says Marriott, whose team has helped with the IPOs of European market leaders like Wise, AUTO1 and Delivery Hero, among others.
“And so that mushy middle of $100m dollar revenue companies growing 20% is not what investors are focused on, because they worry that if they invest in that company, how will it scale enough to get to a place where it can go public in a liquid way?”
Europe vs the US
For those companies that do decide to IPO, the question is: where?
Despite concerns that Europe’s most promising tech companies will continue flocking to the US for more attractive IPO markets, Marriott says that “for many companies, a listing in Europe can still be attractive.”
"If a European tech company is global in nature and has operations in the US, then there's really a choice for them of whether to list in the US or in Europe. And we have that debate with every company. There's definitely pros and cons," he says.
Marriott points out that while initial liquidity might be higher in the US, European markets offer a "home field advantage," attracting more local investors.
Global IPO markets have been on ice in the last few years of economic and geopolitical uncertainty. US president Donald Trump’s unprecedented barrage of tariffs in April led to a series of delays and cancellations of public listings in the US. European companies such as buy now pay, later giant Klarna and climate unicorn 1KOMMA5 postponed their IPOs until further notice.
But Marriott says he’s beginning to see “signs of life in the US IPO market.”
Israeli trading platform eToro, which postponed its lPO in April due to tariff-induced market volatility, listed on NASDAQ in May raising almost $620m.
“For European IPO markets to open again, less volatility is needed,” says Marriott. “We need companies in the US to start going public and perform well in the IPO market, and then we will see the IPO market in Europe open.”
Meanwhile, founders are exploring other exit options, such as private mergers or sales to strategic or private equity buyers.
“We don’t have this pipeline of 20-25 IPOs that have made all these relevant decisions,” says Hannes Gsell, managing director in Goldman's German tech team.
“For me, people are keeping their options open, preparing for different scenarios whether it’s remaining in Europe or going to the US and keeping that optionality.”
The opportunity in Europe
Europe may not have spawned a Google or Facebook, but Goldman bankers said they’re optimistic about the growth of the region’s tech ecosystem.
Marriott points to the fact that, in Europe, the total funding between 2014 and 2024 is 10 times higher than that of the previous decade, having grown from $43bn to $426bn, according to Atomico’s 2024 State of European Tech report.
One of the primary things that has spurred the ecosystem’s growth is successful founders — such as Spotify CEO Daniel Ek, Wise founder Taavet Hinrikus and Skype founder Niklas Zennström — helping to found and invest in new companies, says Marriott.
Ek’s investment firm Prima Materia was one of the early backers of defence unicorn Helsing; Hinrikus’ VC firm Plural has leant into AI, ‘frontier tech’ and climate investments; while Zennström’s VC firm Atomico has now backed hundreds of European startups over two decades.
“You have this experience base, people who've done it before, either working at a company or founding a company — and now are effectively providing capital and advice and guidance to the next stage of entrepreneurs.That’s the most exciting part of what’s going on,” he says.
Despite this, founders in Europe often feel hamstrung by regulatory barriers and a lack of domestic growth capital. A number of initiatives have popped up to unite Europe to make it easier for companies to do business. The EU Inc initiative proposes a single legal entity to help companies scale across European countries and access capital more efficiently.
“The quickest way for everyone to scale is deeper European integration,” says Gsell.
“Europe coming together and providing an opportunity for companies in an easy way to scale faster, get access to capital in a quicker way… I think this also needs to be one of the key areas of focus."
