Personal Finance Startup NerdWallet Files For IPO

NerdWallet logo


NerdWallet, a popular financial information website, has unveiled its S-1 paperwork filed with the US SEC for an initial public offering (IPO). It’s the latest fintech startup kickstarting a journey to the public markets at a time when investor sentiment towards public fintech companies is very favorable.

  • NerdWallet is a popular online destination for financial advice and information pertaining primarily to Americans. It makes money from promoting financial products to its users and getting commissions when purchased, a very lucrative business, as the S-1 paperwork indicates.
  • According to the S-1, NerdWallet has a big business that’s also profitable. The company posted $245mn in revenue and a small net profit of $6mn in 2020. In 2019, it posted $228mn in revenue and a $24mn net profit. 
  • However, in the first half of 2021, NerdWallet posted a net loss $27mn, though its revenue for the same period grew 32% year-over-year to $182mn. Basically, NerdWallet is a very solid business on solid standing, though its growth is not on steroid-like levels like some fellow fintech startups.
NerdWallet was founded in 2009 as a simple website providing comparative information about credit cards. Since then, it’s built a big business on the backs of lucrative commissions that’s usually earned from advertising finance products such as credit card signups. 

To date, NerdWallet has raised over $100mn in funding from VCs. The major VC stockholders listed in the company’s S-1 include Innovius Capital (20.4% pre-IPO stake), Institutional Venture Partners (17.5%), RRE Ventures (6.5%), and iGlobe Partners (6%).
  • Notably, NerdWallet has a dual-class share structure that gives the company’s founder and CEO, Tim Chen, 93% voting power, effectively in control of the company. It’s a controversial structure that’s been adopted by tech founders to keep control of their company despite listing them publicly, famously spearheaded by Facebook CEO Mark Zuckerberg. 
NerdWallet has filed to list on the Nasdaq exchange under the trading symbol “NRDS”. Though the final terms of its IPO, including how much it wants to raise and at what valuation range, haven’t been set, rumors have it that the company is targeting a $5bn valuation.

                                           

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