A British startup attacks the London stock market when it reveals a plan to delist

A British car battery company led by former Tesla executives has withdrawn from the London stock market less than a month after soliciting investors for £500,000.

DG Innovate (DGI), run by former Tesla CEO Peter Bardenfleth, criticized Hanse, saying a lack of support for startups in the city prompted the decision. Abandon the main market and go private.

In particular, the company said red tape surrounding London share listing rules meant it was difficult to raise money, which had hampered its attempts to grow.

However, the company raised £500,000 from investors in early December, claiming the money will keep it afloat until February 2025 and support a new joint venture with Indian company Evage.

It also raised £100,000 in September.

Once the delisting is complete in early 2025, the company said it will propose a mechanism for existing investors – who will retain their stakes – to trade their shares privately.

Mr. Bardenfleth-Hansen was appointed to lead DG Innovate in December 2023, alongside former Tesla executives Christian Edem and Jochen Rudat.

Mr. Bardenfleth-Hansen and Mr. Rudat previously held senior positions in Tesla’s European teams.

DGI’s shareholders include Mr Edem – a former adviser and colleague of Elon Musk – who owns 24% of the company, and Norway’s largest bank DNB.

Following Tuesday’s announcement, the company said: “There has been and continues to be a significant lack of demand for corporate exposure at the current stage of DGI’s development within Traditional institutional investor base in the UK“.

The bosses added that they do not “anticipate any clear near-term catalysts that are likely to change this backdrop.”

DGI shares collapsed by 75% following the announcement, sending the company’s value down to £2.8m from £12m.

Although DGI is a small company, the delisting is a blow to the London stock market’s standing as a place where small businesses can access cash to grow.

Historically, companies have used the stock market as a means of expansion. But three years of outflows from UK equity funds have left small listed companies bereft of support.

The scarcity of new listings has also weakened the London market given the current circumstances An increase in the number of companies being transferred to the private sector by foreign investors.

The London Stock Exchange changed its listing rules earlier this year to ease some of the burdens associated with a flotation, including making it easier to follow decisions without the need for a shareholder vote.

Ironically, DGI took advantage of the recent rule change to go ahead with the delisting plan without shareholder approval.

DG Innovate, based in Wales, is developing batteries made of sodium as an alternative to the lithium batteries more widely used in electric cars.

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