NerdWallet’s IPO filing reveals high-margin content business, accelerating marketing spend

NerdWallet filed to go public as last week concluded. Our S-1 dive had to postpone due to the late hour. NerdWallet’s initial public offering (IPO) comes at an unusual moment. The firm makes financial product recommendations to both consumers and small businesses, putting it in the same market as fintech startups. We get to talk about the value of the written word since NerdWallet is effectively a weaponized content play.

NerdWallet is planning a standard initial public offering (IPO), which means it will raise primary capital in its initial public offering. The company plans to utilize “about $29.0 million of the net proceeds we receive from this offering to repay all outstanding principal amounts and accrued interest under certain promissory notes,” according to the filing. The remaining will be used for general business reasons, such as working capital, operational expenses, and capital expenditures, as well as for running and growing the company.

Institutional Venture Partners (IVP), which owns 17.5 percent of Class A stock ahead of the IPO, RRE Ventures (6.5 percent of pre-IPO shares), and iGlobe Partners are among the investors who would benefit from the NerdWallet IPO (6.0 percent ). (More about the company’s private fundraising history may be found on Crunchbase.) We are interested in learning how COVID-19 has affected NerdWallet’s growth, how quickly revenues are expected to grow in 2021, the company’s historical profitability and recent trends, and how the company maintains its trustworthiness, which we will look into through the lens of editorial independence. Does this make sense? Let us get this party started.

NerdWallet was hit hard by the epidemic, but it was not as bad as it could have been because the company had variable costs it could control. NerdWallet made $228.3 million in revenue in 2019, with only a slight increase to $245.3 million in 2020. Growth of approximately 7.5 percent for a venture-backed company can be fatal. Who would want to invest in a startup at that rate of expansion?

NerdWallet’s growth has recently accelerated, with revenues of $137.3 million in H1 2020, up to $181.6 million in the first half of 2021. The latter amount reflects a growth rate of slightly over 32%, which is significantly higher than the company’s forecast for 2020. NerdWallet’s sluggish growth in 2020 is partly due to the epidemic. The following is a statement from the corporation about how COVID-19 affected certain areas of its business.