like last week came close, NerdWallet filed to go public. Given the late arrival, our S-1 dive had to wait until today.
The NerdWallet IPO comes at an interesting time. The company provides financial product recommendations to both consumers and SMBs, which means it operates in the same market in which fintech startups play. And because NerdWallet is essentially a weaponized content game, we talk about the value of the written word.
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NerdWallet is pursuing a traditional IPO, which means it will be raising primary capital in its public debut. According to its filing, the company intends to “use approximately $29.0 million of the net proceeds from this offering to repay all outstanding principal amounts and interest accrued under certain promissory notes.” The rest will go to running and growing the company, or what lawyers like to call “general corporate purposes, including working capital, operating expenses, and capital expenditures.”
The NerdWallet IPO is a liquidity event for several investment groups, including Institutional Venture Partners (IVP), which owns 17.5% of Class A stock prior to the company’s public offering, RRE Ventures (6.5% of pre-IPO shares), and iGlobe Partners (6.0%). (Crunchbase has more information about the company’s private fundraising history.) Here.)
We want to know how COVID-19 impacted NerdWallet’s growth, how fast it’s expanding revenue in 2021, its historical profitability and its recent trends, and how the company manages to remain trustworthy. question that we will address through the lens of editorial independence. sound good? let’s have some fun.
COVID-19 and NerdWallet
The pandemic wasn’t kind to NerdWallet, but because the firm had variable costs, it wasn’t catastrophic to its overall business.
NerdWallet generated $228.3 million in revenue in 2019, a figure that increased marginally to $245.3 million in 2020. For a venture-backed company, posting growth of around 7.5% can be fatal. At that pace of growth, who would want to support a startup?
Recently, growth has accelerated, with NerdWallet posting $137.3 million in revenue for the first half of 2020, with the figure rising to $181.6 in the first half of 2021. The latter figure represents an increase of over 32%, which is a much healthier number than the former. Company registered in 2020.
The pandemic is partly to blame for NerdWallet’s sluggish 2020 growth. Here’s the company discussing what COVID-19 did to its few lines of business: