2019 has seen Wall Street gripped by IPO fever. But on the other side of the Atlantic, London has remained quiet. Companies that might have considered taking advantage of frothy international equities markets to go public have been put off by the pall of gloom that has resulted from Brexit uncertainty. But it now looks as though investors will have at least one meaty IPO to consider with Trainline reported to be finalising plans for an IPO that could come as soon as next month.
The train and bus ticket booking engine and route planner’s IPO would, at a projected valuation of close to £1 billion, possibly be London’s biggest of the year for a company based in the UK. It would surpass that of Swiss luxury watch company ‘Watches’, who last week unveiled their own IPO plans, targeting a valuation at around £800 million. Trainline’s IPO target valuation is likely to fall just short of the £1.07 billion achieved by Dubai-based payments company Network International, which floated last month.
Trainline was founded by Virgin Trains in 1997 and acquired by U.S.-based private equity firm KKR for £450 million in 2015. That sale came after a failed move to IPO the year earlier but there is little reason to doubt the second try won’t be successful. The online platform processes over £3 billion in ticket sales annually across 45 countries. The company’s offices in London, Edinburgh and Paris employ over 600 people.
If Trainline reaches a £1 billion IPO valuation, it would become one of just a handful of British ‘Unicorns’ – fast growth, technology-centred companies still in private ownership and valued at over $1 billion (£760 million).
Others include online-only bank Monzo, Benevolent AI, which applies machine learning AI to pharmaceuticals R&D and the Oxford Nanopore, the gene-reading technology company.
Current chief executive Clare Gilmarten has led Trainline for 5 years now having joined the company from her previous position as eBay’s head of European business. The company’s business model is cornered on the complexity of European rail ticketing systems. Railways don’t have the same kind of centralised ticket booking system as airlines do. Ms Gilmarten has summed up the plight of rail travellers her company helps solved with:
“If you go London to Birmingham, there are 16 different ticket types and 50 different fares.”
Trainline is the market leader for online train ticket sales in the UK and also has a strong position in Europe following the acquisition of French peer Captain Train for £110 million in 2016. The company has plans to move into the North American and Japanese markets.
Future growth prospects still look strong with between 60% and 70% of train ticket sales in Trainline’s core markets still made at stations. Revenues over the company’s 2017/18 fiscal year were £167 million, providing a pre-tax profit of £38 million.
The prospective IPO is yet to be officially announced with Ms Gilmarten responding to rumours with a statement that, as yet, there was no fixed sales plan for the company.