Oxford Nanopore could herald the true beginning of London’s tech revolution
- The biotech company could fetch a valuation of more than £4bn
- A successful IPO would spell good news for IP Group, which holds a 15 per cent stake
Following its calamitous debut, Deliveroo (ROO) has managed to claw back some of its losses now that its shares have hit the open market. But they are still down more than a quarter from their IPO price, and retail investors who bought into the offer have been left with a severe bout of indigestion.
Deliveroo’s flop is not just an embarrassment for the Amazon (US:AMZN)-backed food delivery company. Having become the poster child for the reforms proposed by the Lord Hill review, it also raises questions over London’s approach to becoming a hub for high growth technology businesses.
Arguably, Deliveroo’s failure to deliver was a problem of its own making. While institutional investors raised concerns over the dual class share structure, they also expressed more fundamental doubts about its business model amid a reliance on gig economy workers.
In that light, it is perhaps unfair to equate the lack of appetite for Deliveroo’s shares with the City’s ambitions to attract more tech listings being doomed. True, the migration of start-ups to New York has continued – both electric van maker Arrival (US:ARVL) and online car retailer Cazoo have been lost to the Spacs craze. But a big upcoming IPO could prove the real test case for London’s tech prospects – that of Oxford Nanopore.
A bona fide tech start-up
Biotechnology company Oxford Nanopore recently announced it had selected London as its IPO venue, and, depending on market conditions, its long-awaited float could arrive in the second half of this year.
The company was spun out of Oxford university in 2005 using seed money from IP Group (IPO), a specialist in commercialising intellectual property. It focuses on genome sequencing technology, developing proprietary tools that can decode the DNA and RNA of any living organism.
Oxford Nanopore’s devices work by passing a sample of DNA or RNA through miniscule holes – called ‘nanopores’ – in a membrane, measuring how the genetic material reacts to an electrical current, and determining the order of the nucleotides. Such sequencing technology has a wide range of applications – from detecting infectious diseases and developing therapies to treat cancer, to analysing biodiversity and improving crop efficiency.
Chief executive Dr Gordon Sanghera says that 2020 was a “pivotal year”. Indeed, the company’s technology has been used around the world to track variants of the virus that causes Covid-19, identifying around a fifth of the ‘SARS-CoV-2’ genomes that have been catalogued by scientists from more than 85 countries.
In August, Oxford Nanopore secured a £113m contract to supply the UK government with its ‘LamPORE’ testing kit, which provides rapid, high-volume and low-cost detection of SARS-CoV-2. That’s more than double the £52m of revenue…