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Raspberry Pi Seeks $211M in London IPO, Valued at £542M

Raspberry Pi to raise $211 million in rare London tech IPO, valuing the firm at £541.6 million.

6/11, 02:17 EDT
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Key Takeaway

  • Raspberry Pi aims to raise $211.2 million in a rare London tech IPO, valuing the firm at £541.6 million.
  • The UK’s FCA is set to approve major listing regime reforms, aiming to attract more companies by easing regulatory requirements.
  • Market reactions are mixed; while some welcome the changes, others worry about potential dilution of investor protection.

Raspberry Pi IPO

British computing startup Raspberry Pi is set to raise £166 million ($211.2 million) from its initial public offering (IPO) on Tuesday. The company has priced its shares at 280 pence apiece, valuing the firm at approximately £541.6 million. Trading of Raspberry Pi shares will commence on the London Stock Exchange once the market opens. This IPO is seen as a rare win for London’s main stock exchange, which has struggled to attract technology listings in recent years.

Raspberry Pi, founded by CEO Eben Upton in 2012, aims to make computing more accessible to young people. The company’s single-board computers have gained popularity among hobbyists and are now widely used in industrial applications, accounting for 72% of its unit sales. In 2023, Raspberry Pi reported revenues of $265.8 million, marking a 41% increase from the previous year. The company has garnered support from high-profile industry players, including Arm and Sony. Last year, Sony Semiconductor Solutions, a subsidiary of Sony Corporation, invested an undisclosed amount in the startup.

UK Listing Regime Overhaul

The UK’s financial watchdog, the Financial Conduct Authority (FCA), is poised to approve the most significant overhaul of the country’s listing regime in 40 years. The FCA board is set to meet on June 27 to decide on the final version of the rules, which aim to revitalize London’s stock market. The changes are expected to be publicly confirmed after the July 4 election, with implementation following a two-week period.

The new rules are designed to attract more companies to float in the UK by easing regulatory requirements. FCA Chief Executive Nikhil Rathi highlighted both the opportunities and risks associated with the reforms. Speaking at the annual Investment Association conference, Rathi stated, “As we do that, we do need to accept that there is a risk of more things going wrong . . . acceptance that with risk comes great opportunity but also potential for failure . . . is important.”

The FCA’s consultation on the new rules, published in December, includes proposals to combine the premium and standard listing segments on the exchange, consolidating all Main Market companies into one category. While the reforms aim to speed up the listing process, they also pose risks such as less scrutiny of corporate transactions, which could potentially erode shareholder value. The FCA has warned that encouraging a more diverse range of companies to list in the UK could open the door to higher-risk businesses.

Market Reactions

The prospect of new listing rules has been met with mixed reactions. Many City advisers have welcomed the changes, seeing them as a necessary step to rejuvenate the London Stock Exchange (LSE), which has seen a decline in IPOs and an increase in take-private deals. Companies like Cambridge-based chip designer Arm have opted to list in the US to access deeper capital markets and higher valuations. Similarly, FTSE 100 companies such as gambling group Flutter and building materials group CRH have moved their primary listings to New York.

However, some investors have expressed concerns that the FCA’s proposals could dilute investor protection. London Stock Exchange Chief Executive Julia Hoggett emphasized the significance of the new rules at an event on Thursday night, describing them as the biggest reform of the UK’s primary market regime in 40 years. She urged advisers to promote the new regime to encourage companies to list in London. Despite her optimism, some attendees were skeptical, recalling that Hoggett had similarly praised the IPO of WE Soda last year, only for the Turkish-owned soda ash producer to cancel its flotation days later.

Management Quotes

  • Eben Upton, CEO of Raspberry Pi:

    "We initially gained traction with hobbyists, but now 72% of our unit sales target the industrial market, where it is used, for example, in factories."