A British firm that sells website addresses has become the latest company to resist the US markets and list on the London Stock Exchange (LSE).
Web domain provider CentralNic announced yesterday that it intends to float on London’s Alternative Investment Market (AIM) to raise capital for buying up the next generation of web addresses. It has already snapped up 25 domain endings, such as .college or .wiki (expected to go live at the end of 2013) but it plans to compete for 35 more including .hotel and .africa.
The company plans to raise £5m when it IPOs at the start of September, giving it a net valuation of £30m. The money will go towards securing more domain endings as regulator ICANN releases them.
CentralNic CEO Ben Crawford CEO told Techworld: "We did a thorough review of the alternatives and found that London offered a strong tech-savvy investor base, as well as lower costs and less onerous demands on company resources associated with listing and being listed."
The City of London headquartered firm currently counts domain endings such as uk.com and us.com in its portfolio of 24 domain endings, which are sold through a range of third-party sellers.
The company, which was incorporated in 1995, hopes that expanding its domain-ending portfolio will help to build on last year’s profits of £1.7m.
Many UK tech companies have traditionally chosen to list on New York’s Nasdaq stock market, including the world’s biggest domain registrar and rival firm, Verisign.
Richard Holway, chairman of analyst firm TechMarketView, told Techworld that he is “delighted” to see CentralNic choose AIM but pointed out that it’s only a “tiddler”.
“What we need is a flow of $1bn plus IPOs like they get in the US,” he said. “Indeed, the $1bn prospects from the UK – like Shazam, Sophos etc – all seem to be eyeing Nasdaq instead. We need big IPOs to get the media, the analysts, the funds and the investors really interested.”
Holway also pointed out that since 2000 there have been more companies removing themselves from the UK’s markets than listing. However, Holway believes the UK is making progress thanks in part to the incentives and tax breaks available on AIM.
“The Enterprise Investment Scheme and the Seed Enterprise Investment Scheme are fantastic for angel investors in UK private tech start-ups,” he said. “Venture Capital Trusts have great tax breaks too! You really wonder what more HMGovt can do.”
Philip Secrett, head of public company advisory at accountancy firm Grant Thornton, told Techworld that activity levels across London markets are still muted, despite a pick up in interest over the course of 2013. He said the rising interest levels could be attributed to confidence in the economy.