Payments fintech CAB Payments Holdings has announced plans to float in London, a shot in the arm for the market as it faces challenges holding on to existing companies and attracting new listings.
CAB Payments, which specialises in foreign exchange and payment services for businesses that send money from developed to emerging markets, is seeking a valuation of between £800mn to more than £1bn, according to people with knowledge of the deal.
The group’s announcement on Thursday comes a week after WE Soda, the world’s leading producer of soda ash, announced its own intention to float in London, targeting a valuation of $7.5bn.
Nevertheless, it has been a bruising start to year for the London Stock Exchange. Proceeds from initial public offerings are down 80 per cent year on year, with only two listings on the main market in the first quarter, according to EY.
Shareholders at CRH, the world’s largest building materials group, on Thursday approved plans to move its primary listing to New York from London. Earlier this year, chip designer Arm opted to list in New York. Nik Storonsky, chief executive of Revolut, one of the UK’s most valuable fintechs, told The Times in May that the company was not considering listing in the UK.
Successive governments have sought to improve the attractiveness of London over other locations, with post-Brexit uncertainty, limited liquidity and onerous rules blamed for the dearth of new listings.
In May, the UK’s Financial Conduct Authority proposed a sweeping overhaul of stock market rules, including scrapping aspects that were blamed for SoftBank’s decision to list Arm on the Nasdaq.
CAB Payments’ chief executive, Bhairav Trivedi, said: “We think the market is resilient and opening up and we do think more companies need to show they’re committed to it”.
“We are a British company — for us it was a very natural thing to look at the UK as the listing location.”
In May, CAB Payments reported annual revenues for 2022 of £109mn, more than double the previous year. Its adjusted earnings before interest, taxes, depreciation and amortisation more than tripled to £56mn.
Its announcement comes two years after another payments company, Wise, had a landmark direct listing in London with a valuation of nearly £9bn.
However, shares in the company formerly known as TransferWise have fallen 37 per cent since its market debut, as the fintech market has been buffeted by rising inflation, falling consumer sentiment and investor wariness.
Trivedi said that CAB Payments’ focus on larger corporates, including banks, rather than direct consumer payments meant that demand for the service had remained strong.
“We haven’t seen any downturn at all — we tend to be relatively insulated from macroeconomic issues because we operate across all geographies,” he said.