The optimal path to go public: An analysis of offer structure, venue, and raising capital
Lukas Haas, Wyatt Hanson, Shaurya Mehta, John Zuercher
Prof. Markus Pelger
Revolut Ltd. is a consumer fintech company headquartered in London, U.K. Its main product is a one-stop mobile application for inexpensive foreign currency exchange, money transfers, aggregating expenses, and buying stocks and cryptocurrencies. Revolut conducts its business using a subscription-based, tiered freemium business model, standing out as one of Europe’s most innovative fintech companies with a stellar user experience. With over 18 million users and a private market valuation of $33 billion, it is Europe’s second most valuable startup after Klarna.
The aim of our project is to work with Revolut to develop the most efficient path towards becoming a publicly traded company at the highest possible valuation, while taking into account the organization's secondary goals. These secondary goals include driving growth through awareness, further improving company reputation and credibility, and the opportunity to raise funding during the public offering process.
Based on our qualitative and quantitative analyses, we suggest that Revolut’s optimal path to the public market is through a direct listing in the United States, after the stock market and financial technology companies in particular have rebounded from current lows.
Techniques and models used
- Indexing consumer and enterprise IPOs across the United States and United Kingdom.
- Python models to analyze Google search trends pre- and post-IPO.
- Web-scraping company and product review sites to analyze changes in reputation pre- and post-IPO.
- Expert interviews with investment bankers, startup CFOs, and an IPO lawyer.
- Tradeoff analyses of different scenarios to enter the public markets.
- Benchmarking of fintech companies across metrics relevant for public market readiness (operating margins, revenue growth, and enterprise value divided by revenue).
- Market sentiment analyses.
- Regulatory deep dives.