Boost for City as Canadian chip designer announces £3bn London float
A Canadian chip designer is planning a £3billion float in London, which is a major vote of confidence in the Square Mile as a destination for technology firms.
Paying tribute to rivals such as Arm and Imagination Technologies, Alphawave IP said it chose the City because of the UK’s ‘incredible technology and semiconductor industry’.
The firm is jointly headquartered in London and Toronto and is planning a research and development base in Cambridge, adding to the growing cluster of firms that have led the area to be dubbed ‘Silicon Fen’.
Tech triumph: Canadian chip designer Alphawave IP is planning a £3bn float in London
The decision represents a significant boost to Britain’s hopes of attracting more listings by leading tech companies after Brexit.
These ambitions were dealt a blow when Deliveroo’s float flopped – but they have been boosted more recently by the drama-free debut of savings app Pensionbee and the decision by cyber security firm Darktrace to press ahead with its own float.
Alphawave yesterday outlined its own plans to list in London. Backers, which include fund giants Blackrock and Janus Henderson, have pledged to buy shares worth £369million as part of the float, valuing the firm at £3.2billion.
The company creates designs for the high-end computer chips used to power infrastructure such as data centres, computers training artificial intelligence and antennae for 5G mobile networks.
It was founded by industry veterans Tony Pialis, Jonathan Rogers, Raj Mahadevan and John Lofton Holt in 2017 and generated revenues of £23.6million and an operating profit of £12.6million last year.
Industry veterans: Founders Tony Pialis, Jonathan Rogers, Raj Mahadevan and John Lofton Holt
Pialis, Alphawave’s chief executive and president, said: ‘We have chosen to come to the UK because of its incredible technology and semiconductor industry ecosystem.
The strong research base in the UK – and our new R&D headquarters in Cambridge – offers an excellent foundation for the next stage of our global growth.’
Holt, Alphawave’s executive chairman, added that there was ‘a long track record in the UK of investors who understand the value of licensing semiconductor intellectual property’. He paid tribute to ‘great British companies’ Arm and Imagination.
Russ Mould, investment director at AJ Bell, said Alphawave’s decision to float came at an opportune moment when global demand for computer chips is booming and investors are ‘on the lookout for hot technology stocks’.
He said: ‘Silicon chips – or semiconductors – are everywhere we look, from our mobile devices, to our computers, cars, washing machines and fridges.
‘Whether the proposed Alphawave IP float flies or flops will depend on the price investors are initially asked to pay and whether the company can live up to – or exceed – the expectations set by its price tag.’
He also suggested many investors would already be familiar with Alphawave’s business model, which is similar to Arm’s. Until it was sold to Japan’s Softbank in 2016, Arm was the UK’s biggest listed technology firm.
It now being sold to US giant Nvidia for £29billion, but the deal faces scrutiny.