Israeli companies are increasingly choosing the London Stock Exchange (LSE) as a strategic platform for international exposure. Today, there are 22 Israeli-affiliated firms listed on the LSE with

a combined market capitalization exceeding $11 billion. Collectively, these companies have raised over $8 billion, highlighting the exchange’s appeal as a capital-raising hub for Israeli businesses, says Michal Freeman-Shor, Head of Primary Markets Israel at the LSE.

One notable example is Plus500, which joined the LSE’s AIM market in 2013, raising $75 million. Five years later, the company moved to the Main Market and has since raised a total of $861 million through six additional funding rounds, growing its market cap from $200 million to $2.5 billion. Other Israeli-listed companies on the LSE include Playtech, Evoke (formerly 888), MTI Wireless Edge, and Windward.

London’s attractiveness stems from its standing as Europe’s largest capital market, offering deep liquidity and a wide base of international investors. According to Freeman-Shor, London’s capital markets have become even more favorable for Israeli firms after the recent financial reforms by the Financial Conduct Authority (FCA) in July 2024, the most significant in 40 years. These changes simplify requirements for historical financial data, allow dual-class shares, and provide a streamlined path to dual listings, enhancing opportunities for Israeli companies looking to access capital in the UK.

Jonathan Morris, a partner at BCLP, anticipates that London’s regulatory reforms will continue to attract Israeli firms seeking IPO opportunities, noting that the LSE offers easier capital access than the Tel Aviv Stock Exchange, as well as fewer barriers to entry than the U.S. markets. London’s lower litigation risks compared to the U.S. make it a safer environment for IPOs, while also offering greater liquidity and index inclusion opportunities.

So far in 2024, London has raised $24 billion through IPOs and follow-on offerings, more than three times the amount raised by Frankfurt, Europe’s second-largest exchange. Data from the LSE shows that 36% of companies listed in London are international, surpassing Nasdaq (20%) and Singapore (18%).

Freeman-Shor, who operates from Tel Aviv and visits London frequently, sees the LSE as advantageous for Israeli firms due to its broad international investor base, lower listing costs, and legal safeguards. She emphasizes that UK investors, in particular, are drawn to Israeli tech companies. With her extensive background in corporate finance and legal expertise, Freeman-Shor brings valuable insight into the Israeli-UK business relationship.

Despite recent global challenges, Freeman-Shor is optimistic about growing ties between the UK and Israel. A UK Department for Business and Trade (DBT) report named Israel among the top ten sources of foreign direct investment projects in the UK for 2023-2024. Israeli firms have been expanding their presence in the UK across diverse sectors like fintech, healthcare, and cybersecurity.

The UK’s appeal as a global financial center, coupled with ease of market access and geographic proximity, makes it an attractive option for Israeli companies. For many Israeli businesses, establishing a foothold in the UK not only provides a gateway to European markets but also serves as a strategic move to balance economic and geopolitical risks. The two-hour time difference and short flight between the UK and Israel further facilitate business operations and maintain strong cross-border connections. Photo by Philippe Salgarolo, Wikimedia commons.