Arm is said to be looking to raise up to $10bn from a listing on the technology-heavy Nasdaq platform and its decision has been seen as a serious blow both to the London Stock Exchange but also to the wider UK tech sector.
Now Paragraf, the Cambridge-based graphene specialist, is also looking to the US to drive the company’s future growth. It has just bought a California-based competitor, Cardea Bio, based in San Diego, which will be renamed Paragraf USA. The acquisition brings extra manufacturing capacity as well as technological expertise with it.
The issue is not so much the acquisition of Cardeo Bio but the view of the company that in order to grow its business it needs to have a US footprint because, as Paragraf founder and CEO Simon Thomas said in an interview with Bloomberg News, while UK investors have, “the appetite to be part of that journey,” it’s not at, “the level that we actually need, if we want to move at the speed that we want to.”
US venture capital investors have certainly got the funds but something else, that seems to be lacking here in the UK, an appetite for higher risk.
Another big issue is the lack of clarity when it comes to the semiconductor industry here in the UK. While the US, the EU, Japan and India, among others, have announced significant investment and government support for their respective semiconductor industries, the UK has been slow to publish its semiconductor strategy – publication is scheduled for the end of May - and companies here in the UK have expressed frustration at having had to wait so long to find out what the government intends for the sector.
Thomas made the point in his interview with Bloomberg that in the US there is clarity, and it knows what it wants to do.
Last year in an interview with New Electronics Thomas said that the US government had offered him help and tax rebates if he moved his business to the US. By comparison, the UK’s Department of International Trade suggested he outsource the company’s manufacturing to Malaysia rather than invest in the UK.
It doesn’t look like Arm will be the last UK tech company to seek a listing in the US.