Wise, founded in the UK in 2011, has revolutionized cross-border payments for individuals and businesses by making them easier, faster and cheaper. After 10 years as a private company, Wise followed in the footsteps of Spotify and Slack by doing a direct listing instead of a regular IPO, at a valuation of $11 billion.
Matt and Gautier discuss the rationale and timing to go public for a profitable hashtagtech company which doesn’t need to raise money, his experience of the direct listing process, and the considerations around a UK listing rather than US.
🎧 Listen here: Spotify | Apple Podcasts 🎧
🗨️ Some of our favourite quotes from the discussion: 🗨️
- “The question is, are you ready? Are you able to divert time to that while still being able to grow the company and invest as you want?
“I said to Kristo: Look, if I’m going to do this in 24 months, Kristo, I’m going to focus on it for the next 24 months. Why not just do it in the next six to nine months and get it done?”
- “Our goal was to make an orderly transition to public markets where our existing shareholder base and, as important if not more, the new shareholder base felt like it was a great process, and were excited to be on the bus. I think you have way less conflicts in a direct listing with that than you do in an IPO.”
- “I think over time, the direct listing is going to get more familiar and especially for companies that don’t need to raise money, a easier way to go public.”
- “When you look at valuations, it was really unclear to us, where you would get a premium valuation. There are the arguments that US investors understand tech firms much better. Then there’s the argument that Adyen is a world-class company. They’re like, well, actually, there’s very few tech growth companies in Europe. Actually, there’s a scarcity premium in Europe. You can look at either of these and make up the story you want to believe that you’re going to get a premium.”
- “I think the big trap that’s easy to fall into is this word IPO readiness. You need to do an IPO, but you need to be public company ready”
Disclaimer: this discussion is not financial advice, nor an investment recommendation, nor a solicitation to buy or sell any financial instruments, or an offer for financial services or any other transaction. The information contained in the recording have no contractual value and are destined for an informational purpose only. Amundsen Investment Management and the participants on this podcast may have holdings in the companies being discussed.