Markets run on stories and Europe’s IPO market needs a bestseller

After two plus years of tumbleweed, the IPO market is finally showing signs of life. News that Beauty Tech Group is filing its nails, ready for a London float, and Pret a Manger is swapping its coffee subscription for a capital subscription, has bankers dusting off the pitch decks for other prospective floats. But let’s not confuse a few headlines with a fullblown comeback. The real question isn’t just whether IPOs are back; it’s what story does this tell the world about Europe’s markets?  

Capital markets thrive on confidence, and confidence is as much about optics as fundamentals. As the aphorism goes, “Perception is reality”. A handful of successful listings can create a halo effect, signalling that Europe is open for business. Conversely, a string of cancellations or underwhelming debuts reinforces the narrative that public markets are yesterday’s news. In that sense, Beauty Tech Group’s decision to list in London is more than a midcap event, it’s a reputational stress test for the City. If it prices well and trades up, it says reforms are working. If not, the headlines write themselves. 

While London is fighting to reclaim relevance, Stockholm is quietly owning the narrative. Nasdaq Stockholm has hosted some of Europe’s largest and bestperforming IPOs this year, helping the region raise billions and proving that investor appetite exists, just not everywhere. Optically, that matters. Issuers follow momentum, and momentum follows perception. If the buzz says that Sweden is hot, it becomes selffulfilling. London, by contrast, is still explaining why it’s not in structural decline and that’s a tough communications brief.   

If you want a single listing that captures the stakes, look at Klarna. The Swedish fintech giant, once Europe’s most valuable startup at $45 billion, is finally pressing ahead with a US IPO, targeting a valuation of up to $14 billion and raising $1.27 billion through a mix of new and secondary shares. This is not just another fintech float; it’s a global headline event. A strong debut would signal renewed investor confidence in highgrowth European tech (even if the venue is New York). A flop, however, would reinforce the perception that the IPO window is fragile and that lofty valuations belong to another era. Either way, Klarna’s optics will ripple far beyond Stockholm.  

If this minirevival fizzles, the implications go beyond deal fees. For companies, it means longer waits for liquidity and more reliance on private capital. That pushes more value creation behind closed doors, shrinking the universe of growth stories accessible to publicmarket investors and pensions, and raising the cost of capital for scaling businesses that could have used the signalling and liquidity benefits of a listing. And for exchanges, especially London, it risks cementing a damaging narrative: that Europe’s flagship market can’t compete for global listings. Once that perception hardens, reversing it is exponentially harder.  

The irony is that despite the IPO drought, London’s blue-chip stocks have delivered strong returns lately: the FTSE 100 is trading around the 9,270 mark at the time of writing - up more than 21% from its April low and near record highs, while heavyweight sectors like mining, defence, and banking have driven double-digit gains, and the index continues to offer an attractive dividend yield of roughly 3.5% plus robust buybacks, making it one of the most income-friendly markets in the world. 

Some argue this is a ‘use it or lose it’ window, a tactical dash before macro headwinds return. If that’s true, the optics of failure are brutal - a few highprofile flops could confirm the suspicion that IPOs are an endangered species. And perception here isn’t cosmetic; it shapes policy, capital flows, and even how and where founders choose to build their businesses.  

Markets run on stories as much as spreadsheets. A strong IPO cycle signals vitality, attracts global capital, and reassures policymakers that reforms are working. A weak one does the opposite. That’s why the next 12 months aren’t just about deal flow, they’re about narrative control. Europe doesn’t need a flood of deals; it needs a few visible wins that say: “we’re back”.  

As Warren Buffet put it, “markets are driven by fear and greed, but mostly by perception”. For Europe’s IPO hopefuls, that perception will decide whether this revival is a renaissance or just a mirage.