Expensify went public today on the Nasdaq under the ticker “EXFY,” after spending more than a decade building out its expenditure management platform. Early results have been excellent, with the business revising its initial listing price up — and its shares still rising 40% on the first day of trade. We have previously written a lot about Expensify, including a thorough dive from my colleague Anna Heim that takes you from the company’s beginnings to its current focus on product-led growth. Meanwhile, when the business filed to go public last month, Alex Wilhelm peeked through the S-1.
However, today I had the opportunity to talk to David Barrett, founder and CEO of Expensify about why the company has opted for a traditional list instead of a SPAC or direct listing and how it transformed the post-Covid corporate expense management department. In addition, a bunch of startups like Ramp and Brex want to offer cost management solutions based on their own corporate card programs. Barrett discusses why he thinks Expensify’s IPO is the “most pro-employee IPO ever,” why he thinks expenditure management — specifically SMB expense management —a trillion-dollar market, and why he does not view Brex as a competitor in the video below.
Barrett, David: We frequently asked this topic, and I believe our response is more along the lines of “Why not?” We are not optimizing for a single transaction, and we will still be the same firm in a month, a year, or ten years. However, we would want to have liquidity along that route. To be honest, I believe what is driving this is just liquidity for our early investors. Our VCs are in desperate need of cash because we have not raised money in a long time. I could wait another year and make an even better return, but I have already made such a large profit that I feel obligated to return it.
We performed a leveraged acquisition of Redpoint since we are a very lucrative firm. As a result, we provided liquidity to one of our first venture capitalists directly from our balance sheet.
That was fantastic, but at some time, we will be profitable, but not to the point where we will be able to buy out our investors for hundreds of millions of dollars every year. We will not be able to obtain that amount of liquidity.
It boiled down to this: there is no way we are not going public at some time in the future. So it is no longer a question of whether or if we should go public, it is a question of when. We have certainly reached the stage where we can go public. All of the prerequisites met. In addition, as a prosperous firm, I am looking forward to the expanded financing alternatives that come with being a public company.