With the NASDAQ now well into bear market territory, USD and GBP inflation reaching 8.6% and 9% respectively, and the Fed, BoE, and ECB raising rates, rotation out of growth shows no signs of slowing. One segment of the market that has suffered especially during the current correction is companies that listed during the pandemic. British companies such as Deliveroo, Peel Hunt, Made.com, musicMagpie, In The Style, Victorian Plumbing, Moonpig, Dr Martens, ProCook, Parsley Box, and Revolution Beauty all listed in 2021 and rode the stay-at-home online boom only to lose much or all of their gains a year later.
As people were confined to their homes during much of 2020 and 2021, online services soared. The tech segment in general saw significant growth, and IPOs rode much of that hype. That perfect storm resulted in soaring valuations. Now, as people return to offices and brick-and-mortar businesses, and a bear market looms over global equities, the downturn has been equally dramatic.
In some cases, valuations have fallen well below list prices. Most notably, Deliveroo is now worth only £1 billion, 1/7th its 2021 listing valuation. ProCook fell more than 30% on Friday after it lowered its profit forecast. Peel Hunt on Thursday reported 34% lower revenue on "exceptionally low levels of capital markets activity". The stock is down 51% from its 2021 IPO price.
In 2021, IPOs in the UK raised £16.9 billion, highest since 2007 and up from £9.4 billion in 2020. The aforementioned companies have collectively lost over £10b so far this year. While 126 companies listed in 2021 and 44 in 2020, only 12 have listed in London in Q1 2022.