Key facts
- SpaceX raised $364 million from British retail investors using the UK's Public Offer Platform (POP).
- The POP regime allows companies to raise capital without a full regulated market listing.
- Broker Winterflood believes the POP regime will see increased adoption by large firms.
- Concerns have been raised about the POP creating a 'two-tier' system for listings.
- The POP's rise occurs amid a challenging IPO market in London.
SpaceX's recent fundraising through the UK's new Public Offer Platform (POP) could signal a new avenue for large companies, particularly from the US, to access British retail investors. The POP regime, introduced by the Financial Conduct Authority (FCA) in January, allows firms to raise over £5 million without the stringent requirements of a regulated public market listing, bypassing the need for a full UK prospectus.
Elon Musk's SpaceX successfully raised approximately $364 million (£267.9 million) through the platform, a move that has surprised some industry observers. Joe Winkley, head of corporate services at Winterflood, one of the brokers involved in the SpaceX deal, admitted he initially underestimated the POP's potential but now believes it could become a regular feature for capital raising. He noted that even a company like US sandwich chain Jersey Mike's has since utilized the platform.
Winkley anticipates that the POP regime will attract deals from other markets, including Europe and Asia, and suggested a strong pipeline of potential future offerings. However, concerns have been raised by some in the City that the POP could create a 'two-tier' system, allowing overseas companies to tap UK capital without the rigorous due diligence associated with a traditional listing. Winkley countered these concerns, emphasizing that brokers like Winterflood conduct their own independent due diligence and are selective about the deals they undertake due to regulatory risks.
The emergence of the POP comes at a time when the London market is experiencing a prolonged IPO drought, with a significant number of large companies being taken over. While some argue the POP further facilitates companies avoiding London listings, Winkley believes that bringing the 'right stories' to the UK market would still attract domestic retail investors. Despite the new opportunities presented by POP, Winterflood's primary focus remains on domestic UK IPOs.