PrimaryBid the online app aiming to democratise access to London and European new issue markets and which is backed by the London Stock Exchange Group is looking further afield for funding to support its growth efforts.
What is PrimaryBid doing?
Reports over the weekend suggest that PrimaryBid is close to agreeing on the final details for a new funding round, that will raise $150.0 million or £110.0 million of new cash.
The round will be led by one of the worlds largest venture cap investors Japan’s SoftBank and more specifically its Vision Funds.
Once complete the series C round is thought likely to value PrimaryBid at more than $500 million or £368 million.
Is PrimaryBid expanding?
PrimaryBid recently moved into bond new issues and opened an office in France as part of a European expansion initiative it also bolstered its board with the appointment of city grandee Sir Donald Brydon as its Chairman.
Sir Donald had previously held executive roles at the London Stock Exchange, Sage, the LME, Royal Mail and Smiths Group and he is a former Chair and CEO of Axa Investment Managers.
To date, PrimaryBids services have been used by more than 180 FTSE and Aim companies, a list that includes Severn Trent, Compass Group, Taylor Wimpey, Ocado, Croda and Aston Martin and has alos run IPOs for the likes of Deliveroo, PensionBee and the owners of Soho House.
However, after 5 years in business, it has yet to reach anything resembling a critical mass.
London-listed IPOs raised almost £17.0 billion in 2021 PrimaryBid participated in just a fraction of that business.
PrimaryBid needs to move more to the mainstream if it is to become the number one venue for retail participation in IPOs and placings.
Why hasn’t PrimaryBid grown at a faster rate?
The platform is broker agnostic and that might be its Achilles heel because it relies on individual investors to open an account and register their interest in a new issue and fund their subscription. On allocation, PrimaryBid transfers the stock or bonds into the investor’s nominated brokerage account.
Perhaps what is needed is a B2B approach rather than the current B2C model.
If Primary Bid could partner with some of the UK’s larger online brokerages and investment platforms then it might start to gather more momentum in its underlying business.
SoftBank’s cash could help the business to grow until that happens, however, PrimaryBid could be seen as a solution to a problem that not enough people appear to care about.