Daily Management Review

The Venture Capital Market is still in nascent in Europe, compared to the US


Adaptimmune Ltd, a UK based biotechnology company has been on the move to create an early funding scenario by expanding their shares to the US stock exchange.

Adaptimmune Ltd, a UK based biotechnology company is currently working on treatments that shall use a patient’s very own immune system to combat the terminal illness called cancer. It presently raised a hefty amount of $191 million from an initial public offering of shares priced at the top end as of Tuesday last week.
It has been observed that after the end of an initial pop, the shares are currently trading flat from the price on offer. Based in Oxford and backed by Oxford University, Adaptimmune is basically the form of high-tech business that defines perfection. No wonder that the UK Government and the London Stock Exchange Group PLC want to see this form of business hit the public sector.
Yet the company has not seemed to live up to the speculations of making an entry into the LSE and as the primary reason it looks like Adaptimmune seemed to have turned its back on London Stock Exchange opting to enlist their shares on Nasdaq  instead.
Nasdaq has also reported that five other U.K high growth companies seemed to have gained a primary listing on the US Market over the past two years raising $2.16 billion. In additional to that, as per available reports King Digital Entertainment PLC, which is a game maker from Dublin, Ireland, has recently raised $500 million in an IPO on the NSE the previous year.
The LSE still has not lost its craze and seems to attract a significant number of tech firms. According to the latest reports from LSE 68 tech firms went public in London over the past two years raising nearly $5.9 billion. However according to Xavier Rolet, chief executive of the LSE, one of the primary reasons for this migration of tech firms to NSE is the arrival of early stage funding in the US which hosts a bigger venture capital market than that in the UK.
“There is a huge deficit of venture capital dedicated to start-ups. A lot of European capital that goes into start-ups is given to U.S. money managers who have been doing it since the mid-1980s. The U.K. only started doing it in the last few years,” said Rolet. This clearly provides the validation of the reason for the venture.
Adaptimmune raised a sum of $104 million from a major proportion of U.S investors. It is evident that when it comes down to IPO, the company’s investors prefer them to list on the U.S stock exchange. The LSE seems set to miss out on Graphene Lighting, which can be termed as a spin-out from Manchester Metropolitan University that have been on the lookout to make light bulbs using grapheme. Graphene is an isotope of carbon with extraordinary physical properties.
The U.K Government has been a high end asset for Manchester University’s work on surrounding the development of grapheme which is expected to provide massive benefits to the economic scenario of U.K. In terms of funding however, Graphene lighting could raise more money in Canada than in the U.K.
Mr. Rolet says that the venture capital industry is growing in Europe, particularly in the U.K., but has a long way to go. “It is the story of Europe. It is not something that can be fixed quickly. It will take years to remedy.” The success of companies such as Adaptimmune might just speed up the process.
According to the observations made by Mr. Rolet he had to say that the venture capital industry has been growing in Europe but the growth is on an incipient level ands still has a long way to go. As quoted by him “It is the story of Europe. It is not something that can be fixed quickly. It will take years to remedy.”