The song was composed by British singer Eric Clapton in 1977. It is one of the most enduring ballads of that era. PM Wong was only four years old when Clapton composed it.
Clapton is grey and fragile at 80. The youth still flock to his recitals. He has evolved from a blues purist to a pop legend. He has won 18 Grammys and sold over 100 million records.
Clapton came from a poor family. He grew up in Ripley, Surrey, a small town on the outskirts of London. His biological father was a Canadian serviceman. Clapton was raised by his grandparents, whom he initially believed were his parents.
His grandfather was a gardener, and his grandmother was a domestic worker. His humble roots deeply influenced his musical style.
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He was drawn to American blues. The masterstroke in his career was that he was able to scale his career in America. The recognition that a singer would get in America was vastly superior to that in Britain. Intellectual property laws were stronger.
Clapton was a prime mover in the British invasion of America. This was a cultural phenomenon of the 1960s, with British rock and pop bands like The Beatles and The Rolling Stones. Clapton rose like a phoenix in America.
These bands brought a fresh sound influenced by American blues, rock ‘n’ roll and R&B. They transformed the global music scene and youth culture.
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Clapton’s song is gaining popularity at a time of another British invasion. This invasion is in the stock market and not music.
The London Stock Exchange (LSE) was once the beating heart of global finance. It is fast losing its pulse when it comes to fintech. British-born champions like Wise are packing their bags and heading to the US.
Like Clapton in the 1960s, they are drawn by the depth. The American capital markets have better valuations. The investor base values tech better. This exodus is more than symbolic — it is a red flag for the future of the UK’s ambitions as a fintech hub.
Wise, the cross-border payments giant, recently announced it would shift its primary listing to New York, downgrading London to a secondary venue. It is trading at six times EV/Sales, but the valuations on Nasdaq could be twice as high.
Wise isn’t alone. Monzo, a pioneering digital bank, is considering a US initial public offering (IPO). Revolut, Britain’s most valuable private fintech, is still hesitating on its listing location. It is eyeing New York as well. Even Arm, the UK chip designer, opted for Nasdaq over LSE in a landmark listing.
Why the Atlantic crossing? Valuation is the main factor. UK fintechs tend to trade at lower multiples than their US counterparts. They are around 7.7 times EV/Ebitda in London versus 13.8 times in New York. That discount reflects not just a capital gap but a cultural one. American investors are more comfortable with high-growth, tech-enabled business models. British institutional investors, increasingly risk-averse, have scaled back domestic equity exposure. It has fallen from over 50% in 1990 to under 5% today.
LSE’s problems are also structural. It does not have tech-friendly listing frameworks. There is a lack of dual-class shares. The trading volumes for tech are a tenth of the US. This makes it an unattractive venue for growth companies. Many of the UK’s 2021 tech IPOs have since collapsed in value or delisted, eroding confidence.
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The consequences are stark. As fintechs flee, the UK loses not just listings but also jobs and tax revenue. The government has floated reforms such as scrapping stamp duties. Other measures include easing listing rules and promoting new tech-focused platforms. The implementation has been slow. Investor sentiment remains tepid.
Unless the UK acts fast, its fintech crown could slip entirely. Attracting founders and investors back to London will require bold tax and regulatory changes. There needs to be a cultural shift toward backing innovation over dividends.
London’s woes may be a lesson for Singapore. The Singapore Exchangeis host to innovative fintechs like iFast Corp. There are others in the private realm, like Chocolate Finance and Endowus. They are waiting in the wings. We hope that they sing on this stage.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
