Data beats Dogma

Lights

There has been a lot of talk in 2016 about the ‘post-truth’ world we live in now. The common narrative around this story is that technology, media, public figures and even our own unwitting friends may be seeking to deceive us. But far less acknowledged is that most often we deceive ourselves - we more readily assimilate information that fits with our preconceived notions, psychologists call this ‘Confirmation Bias’. So what does this have to do with technology, London Stock Exchange and Slush 2016? Well as I like to say, "Data beats dogma".

For a number of years now, the tech industry has benefitted from a number of good actors who have sought to shed light on the changes occurring within this industry. Whether it is the tireless work of the media and practitioners through blogs or the incredible depth of study of investors like Mary Meeker of Kleiner Perkins Caufield Byers, even the recent push to better understand and address diversity, tech is an industry that tries to improve itself with knowledge. In recent years we've been able to add to this collective body of knowledge with the excellent research on the development of the European tech industry produced by the team at Atomico. Their research filled a void, challenging received wisdom about the performance of European tech. So when they asked London Stock Exchange to provide data for a section on the European public markets for their 2016 research, we were delighted to help.

As I have written previously, the public markets are a topic suffused with myth and received wisdom within the tech industry. A major part of what we do at London Stock Exchange is challenging these myths through the use of data. In this effort, a key role is played by our team of analysts. We have found that contrary to popular belief, valuations of tech companies are not driven by listing location, the quality of the company matters more. The data also reinforces our long held view that companies can IPO much sooner than the received wisdom, which usually demands at least $100m ARR. In fact markets like London's AIM with its top quality institutional investors and unrivalled peer group of companies provide an excellent path to growth, as many tech companies have found in 2016.

Throughout 2016 my colleagues and I have spoken to tech companies and their investors from markets as diverse as Sydney, Tel Aviv and San Francisco, and of course the UK and Europe. In all these places we've found that looking at the data on listing blows away the cobwebs of received wisdom. An IPO isn't always for every company. But by at least understanding the reality and by building internal capability through initiatives such as our ELITE programme, companies and their investors are better able to make informed decisions about the future of their businesses.

So it with this behind us, my analyst colleague Sarah and I are delighted to represent London Stock Exchange in Helsinki for Slush 2016. We look forward to meeting many companies and investors and enjoying a lively debate. If you'd like to learn more about the public markets, let me know, we'd be happy to share our data with you.

For more information contact:

James Clark
Business Development Manager