The London Stock Exchange is expanding its reach into Europe with the launch of an EU-wide programme to hothouse entrepreneurs and fast-track small private companies.
It is the latest attempt by the LSE to boost small and medium-sized enterprises. Over the past three years it has signed up close to 260 companies in Italy and the UK to take part in a two-year course of networking and mentoring events and classes, its so-called Elite Programme.
The programme has helped businesses including Naked Wines — the eight-year-old British wine retailer financed by crowd funding, which was last month bought by Majestic Wines, its bigger Aim-quoted rival for £70m — and Graze, the online snacks group.
The LSE is now launching its first EU-wide scheme, signing up almost 25 fledgling enterprises likely to need capital for expansion. The businesses have revenues between €5m and €100m and include a Greek football club, a Finnish software group, a Portuguese mining company and a Croatian financial services business.
Each company pays about £10,000 for access to a network of businesses, advisers and business school academics.
The LSE is working with five European business schools to set up seminars and workshops to help develop the structures and strategies that might appeal to backers.
However, the exchange claims the programme is not a way for it to groom companies for equity issues and stock market listings. It said the idea was to ease the access of fast-growing businesses to different types of funding, including bonds, or venture capital and private equity backing.
A lot of the enterprises are a long way from listing, the LSE added. “It is all about gearing up for growth. The long-term goal is to help build a truly joined up, pan-European funding ladder for ambitious, growing businesses”.
The LSE said it was concerned that the growth, and therefore the opportunity to boost jobs, of too many small businesses was being held back by their reliance on bank debt.
Number of companies that have signed up since the first pilot in Italy
The programme was first launched in Italy in 2012 by Borsa Italiana, part of the LSE since 2007. It was expanded to the UK last year to include British enterprises turning over between £4m and £60m a year and needing help on issues such as structure and succession.
Since the first pilot in Italy, about 260 companies have signed up, said the LSE. Of these, 15 companies have floated, 15 have won private equity backing, 11 have issued bonds and 40 have entered joint ventures or been bought.
In December, the LSE signed up The Company Shop, a profitmaking distributor of surplus food, and MedicAnimal, an animal health business supplying vets and pet owners. MedicAnimal is already backed by venture capital and turns over about £70m a year. Its goal, said Ivan Retzignac, co-founder and former banker, is to scale up and become profitable.