Re-listing of Wise in the US and take-private of Waga Energy

On Thursday, Wise announced its intention to move its primary listing to the US. This is not only a blow to the UK and LSE, but to broader European capital markets.

It’s yet another reminder that Europe keeps losing ground to the US in attracting and retaining successful tech companies. It’s a vicious circle. Why would the next European fintech consider listing in Europe?

You’ll read many views on the root causes: governance, executive pay, market structure, disclosure rules, regulation, low equity ownership, lack of retail participation, etc. Wise explicitly cited its desire to access US retail investors—a key source of market liquidity. This is precisely what’s missing in most of Europe, including the UK, France or Germany.

Last year, we hosted Matt Briers, Wise’s former CFO, on our podcast. At the time, the LSE felt like a natural fit. As he said: “We're happily listed here. Our stock is liquid. We access all of the shareholders in the world that we want to. The vast majority of our shareholders, the phone calls we get are from shareholders in the US who are very happy to trade our stock on the London Stock Exchange.”

Being listed in London gives Wise access to US institutional investors. Moving the primary listing to the US will broaden institutional reach and unlock access to US retail investors.

Meanwhile, European funds are also increasing their share of US holdings rapidly. See the chart below. The consequence ? More European companies will seek US listings. Last week, I attended a conference in Paris with private companies and IPO candidates, and the majority of them are seeing the US as a better listing location.

Europe invests in talent and infrastructure, but misses a critical piece of the puzzle: encouraging equity ownership and building highly competitive capital markets. This should be a top EU political priority.

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On the same day as Wise’s announcement, one of our portfolio companies, Waga Energy, announced a takeover bid by private equity fund EQT Group. We invested four years ago at IPO, and in its latest capital raise last year, owning 1%. Despite strong growth and international expansion, the share price never reflected its potential. Liquidity was a major issue.

In February 2024, Waga was removed from the MSCI index due to declining liquidity—a technical trigger from which it never recovered. This is why we tell IPO candidates: index inclusion matters.

Had Waga accessed a deeper investor base, including retail, its shares may not have been seen as “dead money.” As a cleantech growth company, with European leadership and a proven trackrecord in the US, Waga should have attracted more support from French and European investors.

Wise and Waga are different stories but reflect the same troubling trend: successful European growth companies are exiting public European markets.

And let me guess: in five years, EQT will IPO Waga in the US.