London’s stock market is “completely broken” – and one fintech founder thinks he’s got the fix. Barney Hussey-Yeo, who built AI fintech Cleo into a $1bn unicorn, wants the London Stock Exchange to merge with Nasdaq. Bold? Absolutely. Crazy? Maybe not.
With UK companies fleeing to US markets faster than tourists escaping British weather, something needs to change. Rachel Reeves’ autumn Budget could be make-or-break time for the City’s future. Here’s why a transatlantic stock exchange merger might be exactly what London needs.
Why London’s Stock Market Is Bleeding Companies
Let’s face it – the numbers are dross. This year alone, money transfer giant Wise ditched its London primary listing for the US. It’s part of a pattern that’s got City executives losing sleep.
“The UK is only ever going to have finite capital,” Hussey-Yeo told City AM. “It’s the sixth biggest economy in the world, but it’s finite.”
The problem? UK fintechs are treating London like a training ground. They scale up here, then pack their bags for deeper US capital pools. Cleo did exactly that in 2020, frustrated with Britain’s risk-averse investment landscape.
The LSE-Nasdaq Merger Solution
Hussey-Yeo’s proposing a “pan UK-American stock exchange” that would transform capital access for companies on both sides of the pond.
Think about it – combine London’s regulatory expertise with Nasdaq’s tech-heavy investor base. The result? What he calls “dramatically changed depth of capital and listing prospects” for UK and US companies.
How It Could Actually Work
The new UK-US task force led by Rachel Reeves and Treasury Secretary Scott Bessent creates a perfect opportunity. Hussey-Yeo sees two game-changing moves:
- Capital markets merger – Pool resources across both markets
- Regulatory passport system – Let firms operate seamlessly across both jurisdictions
“Trusted nations trust each other and want to be partners,” he argues. “So then the regulators should trust each other as well.”
Rachel Reeves’ Fintech Strategy vs Reality
Reeves has been pushing hard to boost fintech listings through her Financial Services Growth and Competitiveness Strategy. But here’s the catch – while she’s trying to power up London, companies keep heading west.
Cleo’s numbers tell the story perfectly. Revenue jumped 106% last year to $136m, with subscribers up 42%. Not bad for a company that felt forced to relocate to the US.
The fintech boss admits the UK has become an “incubator economy” – great for starting up, less attractive for staying put.
What Happens Next?
All eyes are on the autumn Budget and what moves Reeves makes. Meanwhile, Hussey-Yeo’s watching his fintech peers closely. Klarna just debuted in New York, while Monzo and Revolut float around (pun intended) as potential listing candidates.
The clock’s ticking for London. A transatlantic merger might sound radical, but when your market’s haemorrhaging companies, radical might be exactly what you need.
FAQ
Q1: Is an LSE-Nasdaq merger actually possible?
A: Technically yes, but it would require massive regulatory coordination between UK and US authorities. The new UK-US task force could provide the framework, but political will on both sides would be crucial.
Q2: Why are UK fintechs leaving for US markets?
A: Deeper capital pools, higher valuations, and more risk-tolerant investors. The US market simply offers better growth funding opportunities for scaling companies.
Q3: What would UK companies gain from a merged exchange?
A: Access to significantly larger investor pools, potentially higher valuations, and simplified cross-border operations. It could stop the brain drain of promising UK companies.
Q4: How realistic is this merger timeline?
A: Hussey-Yeo sees the autumn Budget as a deadline for meaningful action. While a full merger would take years, initial regulatory reforms could happen much faster.
Q5: What other solutions exist for London’s market problems?
A: Regulatory reform, tax incentives for investors, and improved listing rules are all on the table. But most incremental changes haven’t stopped the exodus so far.
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