London Stock Exchange Boosted by Raspberry Pi Flotation
The London Stock Exchange received a much-needed boost this morning as affordable computer supplier Raspberry Pi made a successful debut on the market. The company’s shares were priced at 280p each, at the top of the range published prior to the Initial Public Offering (IPO), valuing Raspberry Pi at £541.6m. However, within minutes of conditional trading beginning, the shares had soared to 392p each.
This strong debut is a welcome development for the UK stock market, which saw a dismal year for flotations in 2023. Only 23 companies went public, a 49% decrease from the previous year, raising concerns about the market’s lack of growth. The successful debut of Raspberry Pi, which raised £166m during its IPO, has raised hopes for future IPOs, particularly in the tech sector, which has been a driving force for the US stock markets in recent years.
Founder and CEO of Raspberry Pi, Eben Upton, expressed his excitement about the company’s first day as a public company, stating, “It’s just a fantastic day, the culmination of a huge amount of work by a lot of people, I couldn’t be happier.” This debut is not only significant for Raspberry Pi, but also for the London Stock Exchange, which lost out to the US last year for the listing of another prominent Cambridge-based business, Arm Holdings.
Mr. Upton explained that Raspberry Pi chose to list in London due to the compelling advantages of the market compared to other possible listing venues. The company’s strong debut is a testament to its success in the market, as it has sold over 60 million low-cost single board computers since its establishment in 2012. Raspberry Pi’s target sales for this year are 8.4 million, and it reported an operating profit of $37.5m on sales of $265.8m last year.
While Raspberry Pi initially aimed to provide affordable computers for young people, it has now expanded into industrial applications, with nearly three-quarters of its sales coming from this sector. Mr. Upton explained that many of their customers are professional design engineers who use Raspberry Pi for work purposes. The company’s wide range of products and capabilities, including building semiconductor IP, designing chips, and providing software, has played a crucial role in its success.
Raspberry Pi’s strong debut is also reflected in its shareholder base, with existing investors owning 67% of the business. The Raspberry Pi Foundation, which promotes computer science education for young people, is the largest shareholder and has committed to remaining a long-term investor. Other notable investors include Arm Technology Investments 2 Ltd, Lansdowne Partners, and Sony’s semiconductor arm.
With the success of Raspberry Pi’s flotation, all eyes are now on Chinese fast-fashion giant Shein, which is rumored to be considering a listing on the London Stock Exchange. The reception for Shein, if it chooses to list in London, will be a significant indicator of the market’s sentiment towards future IPOs.