NerdWallet IPO: What you need to know about a 2021 public offering

NerdWallet, Inc. is a financial services company that helps consumers “make all the right money moves, according to their tagline. They provide free financial advice, tools and content on topics related to making the best money decisions including banking, student loans, taxes, credit cards, insurance, and mortgages. Most people have heard about them because of their reviews of credit cards and other financial products. The company wants to be the go-to place for anything related to making and managing financial decisions and choices. They filed for an IPO in May 2021 and have an expected valuation of $5 billion.


  • Tim Chen, CEO, and Jacob Gibson, former COO, founded the company in 2009
  • The initial focus of the company was helping consumers choose the right credit cards
  • Total fundraising has been $105 million and the three leading investors are: Silicon Valley Bank, Institutional Venture Partners, and Camelot Financial Capital Management
  • Launched in 2009, they generated only $75 in revenue that first year and grew to approximately 300 users. In 2010, they had $65,000 in revenue. They started yielding a profit in 2015.
  • NerdWallet now generates $150 million in annual revenue and has more than 39 million monthly visits to its apps.
  • In Dec 2020, Lauren St. Clair, a former eBay executive, joined the company as CFO
  • Nerdwallet landed on the Nasdaq Exchange on November 4, 2021, using the ticker symbol “NRDS”.

NerdWallet at a glance

Tim Chen and Jacob Gibson started NerdWallet to bring clarity to consumers about life’s financial decisions. Chen and Gibson met in the 8th grade and formed a great friendship throughout high school. After high school, Chen studied Economics at Stanford and Gibson studied Mathematics at MIT. Post college, they both worked in finance on Wall Street.

When the financial crisis hit, Chen found himself without a job. His sister was studying abroad in Australia and starting a business and asked him for advice on choosing the best credit card that wouldn’t erase her fledgling profits with exchange fees. When he offered to help, he assumed it would just take a short amount of time to give her advice. What he found instead was that it was extremely difficult to not only locate this information, it was difficult to find website sources that even appeared trustworthy. He tuned into his public market research and analysis skills and manually created a spreadsheet with data from 7400+ US-based credit unions and forwarded it to his sister, along with his advice. This spreadsheet took on a life of its own as it circled through family, friends and friends of friends and Chen realized he had a useful product on his hands. In early 2009, he put up the initial funds to formally start the business and create the website. And then convinced Gibson to join him as co-founder. In 2010, Gibson became the Chief Operating Officer. He left the company in 2014 to devote more time to his growing family. He is now an angel investor in the Bay Area. As it grows, the company has attracted high profile C-suite leaders like former eBay executive Lauren St. Clair, who joined the company as CFO in December 2020.

The company has won many awards. In 2017, NerdWallet won for Best Company Perks & Benefits. In 2019 they were recognized in the following categories: NerdWallet won for Best Company Perks & Benefits, Best Company Compensation, Best Company Happiness, Best CEOs for Diversity 2019 and Best Product Team 2019. In 2020, NerdWallet was recognized for Best Company Compensation and Best CEOs for Diversity 2020.

NerdWallet uses its company values as guiding principles. They believe that they aren’t just words; but they impact everything they do. Their website reveals and explains their five values:

  1. Consumer, Company, Team, Self: We lean on each other to succeed. Understanding different viewpoints and celebrating our coworkers’ wins lead to stronger decisions and teams.
  2. Relentless Self-Improvement: We take responsibility for getting better every day. We humbly embrace what we don’t know and aren’t afraid to ask questions.
  3. Open, Candid, and Constructive: We are active participants in every interaction. We share feedback with clarity and receive feedback with courage.
  4. Informed Risk-Taking: We set actionable goals that challenge the status quo, knowing it’s safe to fail so long as we learn along the way.
  5. Ownership: We ask, “What can I do to improve the results?” and view challenges as opportunities to find the right solution.

While they knew they had a useful product, it was difficult to start the company. The first six years, Chen bootstrapped the company finances himself. In 2009, they generated $75 in revenue and had just under 300 total users. By 2010, they generated $65,000 in revenue. By 2015, they were consistently turning a profit. Now they are generating over $150 million in revenue annually and have over 39 million monthly users. Their business model is based on affiliate commissions. Financial companies, such as credit card companies or banks offering personal loans, pay NerdWallet for every sign up that is generated by NerdWallet’s platforms.

NerdWallet functions primarily in the North American and UK markets. Revenues are generated digitally by users on their financial tech platform which can be accessed via the web and apps. 92% of its site traffic originates in the US and 4% comes from Canada, the UK and India. The underlying vision of NerdWallet is according to NerdWallet, “The idea of a world where everyone is empowered to make financial decisions with confidence transcends any individual, permeating the entire organization’s values.”

The mission of NerdWallet is “to provide clarity for all of life’s financial decisions.”. This is visible in their revenue generating actions and also in their impact arm, The Financial Equality Project. Through this initiative they support credit unions that serve low income communities to provide equitable access to financial products and services. They also have partnered with Inclusiv, a nonprofit network of community development credit unions providing capital and support for credit unions serving low-income communities. And they have created The Bay Area Impact Fund.

NerdWallet fundraising to know about

NerdWallet has had 6 rounds of funding and raised a total of $105 million. Here’s a breakdown of key fundraising over the years:

  • Series A: January 2014, undisclosed amount and origin
  • Debt Financing: May 2015, $36 million, Silicon Valley Bank
  • Series A: May 2015, $64 million, Institutional Venture Partners
  • Series A: May 2015, $5 million, Camelot Financial Capital Management
  • Series A: May 2015, $5 million, Camelot Financial Capital Management
  • Secondary Market: May 2021, undisclosed amount and origin

Being a private company, they do not share sales or valuation information on a regular basis and are not obligated to do so. The last time they shared their valuation was 2016 and at that time it was $520 million.

Additionally they have acquired three companies to increase their market share:

  • In June 2016, they acquired aboutLife, a financial planning company focused on retirement, for an undisclosed amount.
  • In August 2020, they acquired Know Your Money, a UK-based financial comparison website geared towards adding transparency for people making financial decisions, for an undisclosed amount.
  • In October 2020, they acquired Fundera, a marketplace for the financial decisions and services needed by small businesses, for an undisclosed amount. It now functions as a subsidiary of NerdWallet.

Further strengthening the brand, NerdWallet owns three registered trademarks:

  • October 2012, TravelNerd®: trademark registration for software for searching, viewing and comparing airline fees; software for searching for, viewing and comparing gasoline prices; software for viewing, sorting and filtering airport information, namely, terminal maps, airport ground transportation, airport parking, airport restaurants, airport shops, airport lounges, airlines and airport amenities
  • Dec 2015, NerdWallet®: trademark registration for the category of providing financial consultation services to individuals.
  • July 2018, Turn to the Nerds®: trademark registration for promoting the goods and services of others by providing a website featuring financial products, coupons, rebates, price-comparison information, product reviews, links to the retail websites of others, and discount information.

Path to the NerdWallet IPO

NerdWallet has been intensely private about its sales, revenues and valuations across the years. The expected valuation with the 2021 IPO is $5 billion but it is not known publicly when it crossed the unicorn threshold of $1 billion valuation. About two years after starting NerdWallet, Chen was offered a lucrative hedge fund manager position and turned it down because by then NerdWallet was successful and he didn’t want to go back to working for someone else. Under Chen’s leadership, the company has steadily grown in service offerings and revenues.

They have three major investors: Silicon Valley Bank, Institutional Venture Partners, and Camelot Financial Capital Management. Now they are considering an IPO. Their May 2021 IPO filing is confidential. They have hired a group of bankers led by Morgan Stanley to underwrite the IPO. The goal is to go public by the end of 2021 depending on market conditions. Neither NerdWallet nor Morgan Stanley have released a statement about the IPO though insiders say the company could seek a valuation as high as $5 billion.

Related: You can learn more about IPOs here.

What investors should know about the NerdWallet IPO

All investments have risks. Let’s explore what type of risks investors might need to consider with a NerdWallet IPO. The first area to consider with any company is whether they have any history of controversy or bad performance. NerdWallet doesn’t have bad performance or huge controversies in its history. However, there have been times when consumers questioned the objectivity of the reviews on the website. The accusation was not specific to NerdWallet but to all fin tech companies that earn revenues via affiliate sales off of products they recommend. THe concern was that companies that had better affiliate payout arrangements would be more highly recommended by the companies. NerdWallet is known as being fanatical about keeping a separation between the Content Creation and the Business Development components of the business. No one has ever found evidence that NerdWallet engages in practices that would undermine its objectivity.

The next area to consider is what markets they are currently in, where they may want to expand to and if there are any inherent risks in those new markets. Currently they operate primarily in the North American and UK markets. 92% of its site traffic originates in the US and 4% come out of Canada, the UK and India. The other 4% is undefined. But it is trying to increase its market share in the UK. First with its acquisition of Know Your Money in 2020 and now as of June 2021, they have partnered with Fluent Money Group to be its exclusive partner and provider of secured loans, mortgages and equity release products in the UK. By taking the expansion method of acquisition, they are reducing their costs to enter new markets and able to capitalize on the early success of these companies.

Another area to consider is what are the risks inherent in how NerdWallet does business. Their business model relies on affiliate commissions from consumers signing up for products and services from financial institutions that are written about in NerdWallet content. The negotiation of profitable affiliate contracts and the persuasiveness of the NerdWallet content impact whether consumers sign up for these products, thus generating revenue for the company.

However, this model assumes that the platform accessed is user-friendly and that consumers return to it again and again. This shows that NerdWallet isn’t just a financial services company, but a fintech company. According to Crunchbase, it uses over 50 tech products and services to deliver its services to customers. The user experience – including ease of use and whether it answers their questions – drives the success of the company and this depends on remaining on the cutting edge of technology and continued investment in the technological infrastructure of the company. There is a risk here surrounding their ability to maintain the needed investment level if they do not increase their available capital. In 2021, Aberdeen projects they will spend $6 million on IT.

NerdWallet is operating in a competitive environment that includes companies such as: Credit Karma, Bankrate, Inc., FeeX, Mint, SoFi and Credit Sesame. Mint and SoFi are publicly traded and the others are privately owned. Bankrate was publicly traded for 10 years but in a buy-out it returned to private ownership. Because of the cost of user acquisition, financial product and services corporations are willing to pour billions into companies like NerdWallet that help them find customers – especially at key entry points such as choosing a credit card, a primary bank or a mortgage. Why is this? The average American consumer doesn’t actually change financial providers that frequently. Data shows they keep their bank accounts for more than 15 years – capturing the consumer when they’re making this choice creates and keeps a long term, lucrative customer.

NerdWallet and the industry have not been drastically changed or harmed by the global COVID-19 pandemic. In fact, CEO Chen has stated that the Coronavirus pandemic has accelerated the company’s growth as more and more people seek out financial advice on topics like refinancing or maximizing interest rates. A key indicator that the company is anticipating positive growth is that they are hiring in a lot of departments. The two biggest areas where they’re staffing up are IT and Sales.

Bottom line

The NerdWallet IPO date occurred on November 4, 2021. They will benefit from the fact that consumers are more and more comfortable obtaining financial advice online. Market trends show that consumers enjoy reviewing other customer’s reviews as a key part of their buying decision. While no one is exempt from risk, if NerdWallet can continue negotiating profitable affiliate contracts, generating persuasive content and expanding to new markets, there is potential for gain.

“Seeing NerdWallet grow from a singular credit cards tool in 2009 to providing content and tools across 11 personal finance topics today is something I have great pride in,” said Tim Chen, CEO and cofounder of NerdWallet in 2016. NerdWallet’s continued growth will be buoyed by the infusion of capital received from an IPO.

Related:What to know about the 2021 Reddit IPO

Julie Pierce Onos is a Massachusetts-based writer and Organization Development expert. She loves the stories that numbers tell us about business, relationships and health. You can connect with her on Twitter at @juliepierceonos.

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