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Moore Stephens's latest Tech AIM barometer finds that tech companies listed on AIM have raised over £575 million in the six months ended 30 June 2018.

  • Technology companies on AIM raise over £575 million in six months ended 30 June 2018.
  • The average enterprise value of a technology company on the Alternative Investment Market (AIM) as at 30 June 2018 was £123 million – a 8.2% increase from 31 December 2017 and more than double the average value as at June 2016.

The increase in value in the last six months has been driven by support services (increase of 17%) and software (increase of 9%) with hardware values decreasing by 9%. This compares with the FTSE AIM All-share index increasing by 3% in the last six months and the FTSE All-Share index remaining flat. 

There was a significant bounce back in tech IPOs on AIM in the second half of 2017 and this has continued in 2018. In the first half of the year, eight tech companies floated on AIM raising an average of £24 million each. 

Not only is the number of tech companies floating on AIM increasing, but the funds these companies are initially raising is becoming larger – showing the continued confidence in the tech sector or, perhaps, a sign of investors not wanting to miss out on the next big success. 

And it is not just UK tech companies that have been attracted to AIM – with Australian-based Maestrano and Irish company VR Education joining in the last six months. There is no doubt that these companies have been attracted to AIM as a result of the continuing increasing valuations on offer as well as the knowledge that, further down the line, they will have the ability to successfully raise secondary funds, as demonstrated by AIM tech companies raising over £1 billion in the last 12 months.

The latest report, available for download here, summarises our detailed research into the activities of technology companies trading on AIM in the six months ended 30 June 2018. 

Key findings include:

  • there were eight tech IPOs on AIM, raising £186 million, in the six month period to 30 June 2018, compared with eight in all of 2017 raising £129 million;
  • over £390 million was raised from secondary fundraisings in the six month period to 30 June 2018 – down from £810 million in the previous six months but still the second largest amount in the last three years;
  • a decrease in revenue valuation multiple to 2.17x;
  • an increase in the overall EV/EBITDA valuation multiple to 15.0 with multiples in support services and hardware higher than software for the first time; 
  • the number of technology companies on AIM has increased from 168 to 170 with IPOs outnumbering delistings and acquisitions.

This article was written by Dougie Hunter, Director of Moore Stephens, and was originally posted here.

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