Personal finance site NerdWallet has filed a prospectus to go public, with reports indicating it could seek up to a $5 billion valuation. What should investors think about this business model? Join senior analyst Asit Sharma and host/contributor Emily Flippen as they discuss another upcoming IPO.
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This video was recorded on Oct. 19, 2021.
Emily Flippen: Welcome to Industry Focus. Today is Tuesday, October 19th, and I’m your Consumer Goods host Emily Flippen. Today, I am joined by Motley Fool Senior Analyst Asit Sharma. We’re going to be talking about another business that’s headed to public markets. Yes, we’ve been doing a lot of S-1 shows. But this company is really interesting and I think a lot of consumers may have heard about it before. It’s NerdWallet.
Asit Sharma: Yeah. Emily, I’m so excited to be nerding out with you today for a few minutes on this one.
Emily Flippen: Yeah. I was really excited when I saw that this company filed to go public because I’m familiar with it. As a consumer myself, I will imagine that a lot of our listeners, if you engage with Motley Fool’s content like listening to our podcast, subscribing to our services, I’m willing to take a bet that you’ve probably also engaged a little bit with NerdWallet. They are in the personal finance space, their website really aimed at providing financial education. But really, on all actually, trying to get you sound FERC credit card, maybe takeout alone if you need it. But they are really about empowering consumers. I was excited to see this business go public. But as we were preparing our notes for today’s show, I noticed that we got different reads, I think, from this business. That’s great because we don’t often disagree, Asit.
Asit Sharma: It’s a wonderful, Emily, to able to think, “I disagree with Emily on this one.” [laughs] If you are too sympatico, it leads to not optimal investment results. I think this is positive and actually, I like this business. I mean, circling around to the business as a whole. Just a short cut where I’m going to land by the end of this half-hour, yeah, think it’s investable. But there are few things did turn me off. Let’s start with the things that you like. I think where we interpreted a bit differently around that the introduction of this company to the public markets. Yeah, I too have popped on their site a few times in the past few years. Haven’t signed up for a product through NerdWallet, but it’s certainly in searching for other things happened upon it and senior content. It’s great story, well organized, etc. But tell us about the founding of the company and what you like when you were first going through that prospectus. [laughs]
Emily Flippen: I actually liked the CEO/founder. His name is Tim Chen. He founded the company back in 2009. Really, to start as a spreadsheet. I think he was working for his sister who is interested in getting a credit card, but was really confused about all the different options out there. He set up the spreadsheet essentially to kind of track and understand the benefits of different cards to help them power her to make the decision that was best for her finances. I enjoyed not only that back story, but actually reading through the shareholder letter. There’s a big letter at the beginning of the prospectus written by Chen. The focus is really on providing, I won’t say investors, I guess, consumers with simplicity and clarity. My personal Motley value here at the Fool is transparency. I think that so much of the financial services industry is committed to […]
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