Privately owned companies valued at over $1 billion, known as unicorns, may increasingly look to list on the stock market now that interest rates have peaked, according to UBS, with possible UK arrivals ranging from Revolut to Monzo, Brewdog to Gymshark.
Historically, mergers and acquisitions have accounted for the majority of exits for the backers of these sorts of businesses, followed by buyouts and secondary buyouts.
However, as the market recovers, IPOs could play a more prominent role, UBS said in a research report that put 100-plus 'game-changing' unicorns in the spotlight for its clients, including a swathe based in the UK.
UBS notes that the private market has remained active, with over $11 billion raised by European startups in the past year, despite a challenging environment due to higher interest rates.
This includes notable funding rounds for UK unicorns such as Monzo, which has raised $610 million this year.
There are currently more than 30 unicorns in the UK, including better-known names like Brewdog, Revolut, Monzo, Starling Bank, eToro, Gymshark, DAZN, SumUp and OakNorth, to others like Beauty Pie, Multiverse, Marshmallow Insurance and ManyPets.
"As the interest rate cycle has peaked, caution on the sector has shifted to optimism."
While deals and exit activity in the financial sector have slowed in recent years, some market participants expect to see the bulk of recovery in 2025, it was noted.