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In a significant boost to the UK stock market, shares in Raspberry Pi, the Cambridge-based maker of low-cost micro-computers, surged by more than a third on their first day of trading on the London Stock Exchange.
The stock jumped from a listing price of 280p to 385p, marking a 37.2% increase and valuing the 15-year-old company at over £750 million.
The enthusiastic reception for Raspberry Pi’s initial public offering (IPO) has reignited hopes that the UK market can regain its competitive edge against international rivals. The floatation saw strong backing from cornerstone investors, including Arm Holdings and Lansdowne Partners, which committed £27 million and £16 million, respectively. Retail investors will be able to start trading Raspberry Pi shares on Friday.
Raspberry Pi aims to raise £166 million from the listing, with its staff set to gain £68 million through an employee incentive scheme, equating to approximately £660,000 per worker. Eben Upton, the 46-year-old CEO of Raspberry Pi, praised UK investors’ understanding and support, hoping this successful float would dispel misconceptions about the UK market’s capability compared to the US.
The IPO comes at a crucial time for the London Stock Exchange, which has seen prominent companies like Arm Holdings and Flutter move their primary listings to New York. However, Upton expressed confidence in the UK market, noting the benefits of being in their home market and the positive response from investors during the nine-month roadshow leading up to the float.
Founded in 2008, Raspberry Pi was born out of Upton’s desire to inspire interest in computer science among young people. The company’s affordable, credit card-sized computers have since found wide-ranging applications, particularly in the industrial electronics market, where they are used by over 1,300 companies.
The proceeds from the IPO will be used to fund engineering projects, improve the supply chain, and support other corporate purposes. Kathleen Brooks, research director at XTB, described the IPO’s warm reception as a positive signal for the London stock market, suggesting it could encourage more companies to list in the UK.
Raspberry Pi’s float may also boost confidence in the City’s IPO market, which has been subdued due to rising interest rates and cautious investor sentiment. Analysts at Peel Hunt highlighted the significance of Raspberry Pi’s listing, indicating it could positively impact the broader market. The improving economic outlook for the UK, coupled with strong performances in banking, mining, and energy sectors, is expected to support the IPO market moving forward.
Additionally, companies like Klarna, Waterstones, and Starling Bank are anticipated to consider IPOs, buoyed by the improving market conditions. Despite ongoing challenges, such as low valuations and liquidity issues, Raspberry Pi’s successful float represents a beacon of hope for the London Stock Exchange, potentially paving the way for more tech success stories in the UK market.
