Personal finance specialist NerdWallet files for an IPO

NerdWallet, a provider of financial guidance to consumers through a range of different tools, is set to go public after it filed an IPO.

While the company has not shared the official terms of the offering, Reuters has claimed the California-based NerdWallet could seek a valuation of up to $5bn.

Launched in 2009, NerdWallet provides financial support to consumers through education content, IPOproduct marketplaces and tools and calculators. The company claims it aims to help people find the right credit cards and mortgage rates, refinance their student their loans and track their spending amongst other things.

According to Coverager, NerdWallet secured an average of 21 million monthly unique users in the first half of this year. The company recorded a net loss of $26.8m on revenue of $181.6m for the same period.

NerdWallet has also spread its reach into the insurance space through partnerships with various companies including Allstate, Liberty Mutual and USAA. The company recently introduced a phone service built by InsurTech bolt that allows users to compare and buy insurance in a move aimed at building recurring revenue streams.

NerdWallet commented, “We believe the services provided by financial advisors, insurance agencies, loan brokers and others will increasingly transition online in the coming years, which will expand our addressable market. As a result of this offline-to-online shift, offline sales commission dollars will be reallocated to better align with the growth and importance of digital channels.

“To illustrate the growth potential of our addressable market, for example, the life insurance industry in 2019 spent $9 billion on advertising, of which $2 billion was digital advertising—yet, $13-$15 billion in commissions were still paid to agencies. As financial services providers modernize their approach to sales commissions and related compensation, we expect that our addressable market opportunity will continue to grow.”

NerdWallet is one of many FinTechs currently going through its IPO. Recently, Drake-backed FinTech Aspiration revealed it was set to go public through a $2.3bn merger with special purpose acquisition company InterPrivate III Financial Partners. Earlier this year, Robinhood mentioned it plans to raise up to $2.3bn in an initial public offering.

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