More than 30 years ago, tech CEO Bernard Liautaud decided to list his company BusinessObjects on the Nasdaq, becoming the first European tech company to do so. That decision was visionary, recognising that Europe lacked the infrastructure to support a high-growth software IPO. It was also a red flag to Europe’s public markets that something was amiss.
Three decades later, we're still convening panels, writing reports and lamenting "lost listings". Shareholders in fintech Wise will vote on Monday on whether to have a dual listing in New York and London. The company's plan to do this has led to an outpouring of indignation that we are “losing” another national champion to US exchanges. But this reflexive handwringing misses the point. In a global market, capital has no passport, and IPO listings are not patriotic gestures.
Whether a company lists on Euronext, the LSE or Nasdaq, it is subject to the same imperatives: access to capital, liquidity, institutional reach and long-term investor support. Judging listings by geography rather than outcome is futile, especially when the US capital markets offer unmatched advantages. If we want to rebalance the competitive landscape, it’s time for Europe to stop lamenting and start building.
Europe’s gaps
Europe leads in advanced manufacturing, luxury goods, clean energy and many more industries. Sector expertise, analyst coverage and investor familiarity exist. And some companies, such as ASML and SAP, have thrived with European listings. But they are the exception, not the norm. For many high-growth tech firms, US markets offer a superior ecosystem.
The reality is that 24% of NYSE listings are foreign. On Nasdaq, it’s nearly 20%. London boasts a higher proportion at 35%, but many of those are non-European. Euronext’s non-European share of companies is just 10%.
Our challenges are structural and cultural. Structurally, we remain fragmented. Unlike the US, we lack a unified capital market with a deep, borderless pool of risk capital. Instead, we operate a patchwork of national exchanges — with one-third of the capital the US has, spread across 30 individual stock exchanges, limiting investment potential. The revocation of the UK’s EU passporting rights post-Brexit has only worsened this fragmentation, diminishing the LSE’s standing among international investors despite its legal infrastructure. Common law, which has proven to be a cornerstone competitive advantage for major exchanges, is not enough when pan-European access is restricted.
Culturally, we Europeans like a bond more than we like equity. We have to rebalance to deepen the equity pool here in Europe and begin to compete with New York.
Rather than viewing a company’s listing venue as an act of patriotism, European policymakers should focus on making capital markets more attractive: unifying exchanges, providing incentives that foster a more expansive equity ownership culture, nurturing long-term investment behaviour and ensuring regulatory competitiveness. A multi-threaded action plan involving financial regulators, national treasury departments, fund managers of all varieties, investment banks and entrepreneurs is required if we want to compete.
Learn from the US advantage
Until Europe offers one deep, unified, liquid capital market, we will remain second fiddle to New York. The NYSE and Nasdaq collectively represent over $50tn in market capitalisation — more than three times the combined value of Europe’s exchanges. This scale matters. It reflects a deep pool of capital supported by a powerful institutional investor base: state pension funds, 401(k)s, mutual funds, endowments, sovereign wealth funds and hedge funds that actively seek growth and reward ambition.
More fundamentally, the US enjoys a deeply embedded equity culture. Americans — both retail and institutional — see equities as the default vehicle for long-term wealth creation. US pension funds typically hold more than 40% of assets in equities; in Europe, it’s between 20% and 30%. This equity-first mindset translates into greater post-IPO support and liquidity for US-listed companies.
Layer in purpose-built infrastructure — analysts, market makers, legal frameworks — and a regulatory environment like the JOBS Act (a 2012 law aimed at encouraging funding of small businesses by easing securities regulations, such as through crowdfunding) and foreign private issuer regime (which provides certain accommodations to foreign companies listed on US exchanges, reducing the burden of some US securities regulations), and it’s easy to see why high-growth companies, particularly in tech, choose the US. Wise, ARM, Flutter, UiPath, myTheresa, all born in Europe, chose New York for compelling strategic reasons. ARM’s blockbuster 2023 Nasdaq IPO, for instance, was a clear choice to be valued alongside global peers. It was a decision that paid off.
Europe needs to learn from what the US is doing. Until that happens, there is no justification for chastising European founders who choose to IPO on one of the New York exchanges.
Time for a better spread
It’s high time for this navel-gazing to end. We can’t create a homegrown IPO and equity-first culture overnight, but it certainly won’t be built if we keep hand-wringing instead of getting hands-on. There are pragmatic things we can do to arrest the diminishing relevance of Europe’s public markets, especially for tech companies.
We must focus on integrating European exchanges and building the ecosystem and culture required to compete with New York. Until then, founders and boards will continue to do what’s best for their business and stakeholders.
IPOs are not loyalty tests. They are strategic acts of capital formation. If Europe wants a place at the table, it needs to lay on a better spread.
