Spike in fundraising activity sees £1.75bn raised on AIM in 2017 (so far)

Despite continued economic uncertainty, IPO deal value hit £834m between July and September - the highest amount for that period in a decade

A spike in fundraising activity has seen the Alternative Investment Market (AIM) recover from a poor start to the year, according to a report by Dealogic.

The research provider’s data finds that £1.7bn of funds have been raised for initial public offerings (IPO) on the London junior stock exchange to date in 2017.

The findings come in stark contrast to 2016, where just £1.1bn was rasied in the entire 12 months of that year.

Despite a very slow start to 2017, caused in part by uncertainty over the future of the UK’s economy and its position within the European Union, IPO deal value hit £834m between July and September – the highest amount for that period in a decade (2007).

While the AIM all-share index has risen by 20% since January 2017.

It’s suggested that AIM businesses, many of which sell the majority of their goods and services to domestic buyers rather than being wholly reliant on foreign trade, are less exposed to “Brexit-related” risks such as currency fluctuations and potential changes in trade regulation.

Last year, 38 companies in total chose to float on AIM, ending the year up more than 39% on average, while the 263 firms already listed raised more than £3.8bn in further fundraising.

Top preforming businesses included the likes of Blue Prism Group, Franchise Brands, MaxCyte Inc, Hotel Chocolat Group and Yu Group.

2016 was itself a massive improvement on 2015, which was considered to be the worst year for new issues since since 2009, and biggest net decrease in listings since 2012.

Stuart Andrews, head of corporate finance at UK broker finnCap, said:

“Large businesses can afford to put off their big plans and decision-making, but smaller businesses evolve or die.

“If there are windows of opportunities for them to develop their business, the market is open and equity valuations are good, which is the case currently, they will act.”