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Nerdwallet

Marketplace for financial products 

Investment strategy Pre-IPO

Nerdwallet helps the consumer to make the right choice among a variety of financial products: credit cards, loans, insurance policies, etc. — or just use financial advice. A platform provides consumers with personalized, unbiased advice so they can make smart money moves.

  • In 2020, Nerdwallet began geographic expansion outside the United States.
  • More than 160 million active users; the prospect of further growth in new platform markets outside the United States. 
  • Compares over 500 financial products such as credit cards, mortgage offers, consumer loans, investment offers, insurance, and more.
  • Partners up with all American and international banks and operators, including Bank of America, Barclay, Citi, US Bank, Chase, Capital One, Wells Fargo, Discover, AmEx, Visa, Mastercard and others. Covers the personal finance and small business finance market in the United States with the potential for further expansion to the UK and beyond.
  • Included in the top 250 leading fintech companies in the world according to CB Insights.

FINANCIAL PERFORMANCE NERDWALLET

  • Total investments: $ 105 million
  • Final round: $ 69 million — Series A
  • Last Round Valuation: $ 669M
  • Last Round share price: $ 4.5
  • Last round date: October 2015
  • Major Investors: IVP, RRE Ventures, iGlobe Partners, Silicon Valley Bank

POTENTIAL ROI

Nerdwallet works at the intersection of e-commerce and fintech. Both of these sectors are considered highly promising, as we see the proof in several recent acquisitions. For example, Credit Karma, with 100 million active users in a similar niche, was acquired in 2020 for $ 8.1 billion. The acquirer share price rose 24% at the time of the announcement of the deal.

Having been a profitable company for the past 7 years, Nerdwallet does not need additional funding now. Our analytics expect the company to continue its international expansion, increasing its market share and growing its user base. We also anticipate growth in revenue per user through cross-selling and expansion into related sectors such as small business services (a niche that the company entered with the purchase of Fundera). Further efficiency gains will also drive user base and business growth.

160 million active users and $ 150 million in annual revenue will give Nerdwallet a high rating when it goes public. The expected capitalization is at least $ 11 billion, based on the assessment of the latest deals in the sector.

MARKET PERSPECTIVES

Nerdwallet operates in the personal finance market, where the amount of annual transactions already reaches $ 1 trillion in the US alone and almost $ 1.5 trillion in the world. This is a dynamically growing niche, and, according to Statista, in the next 5 years, the annual growth will be at least 19%.

The COVID-19 restrictions have kicked off the transformation and digitalization of the banking industry. Aggregators of this information for individuals and small businesses will be at the forefront of the growth in demand for digital banking services.

Americans between 30 and 36 y.o. prefer to independently study personal finance issues on specialized sites or social networks. 

MANAGEMENT

Tim Chen has founded Nerdwallet in 2009 and still hold the CEO position in the company. The number of employees has already exceeded 300 people and is constantly growing — including through acquisitions and expansions into new niches and geographic locations.

The workforce is diverse, with experience both in fintech startups (such as StubHub) and in industry leaders (eBay, Intuit, Yahoo, Netflix, Playstation, and Facebook). The key to the successful development of Nerdwallet is the competence of management both in the financial sector and in the online trading segment.

RISKS

The major risks are the refusal of financial institutions from Nerdwallet products, increased competition and the emergence of more attractive platforms for users.

A shrinking consumer finance market will also negatively impact Nerdwallet’s revenue.

Aggressive expansion into other markets can create additional operational risks for the company’s business.

HOW TO BUY

To buy Nerdwallet shares, contact our managers.