In mid-2020, during the early onset of the pandemic, mobile remittance company Remitly began considering a potential IPO. With a little over a year to prepare, the pressure was on for Remitly CFO Susanna Morgan and her team to get the company public market-ready.
The experience gave Susanna a lot of insight and scar tissue to share on IPO readiness with CFOs in The Circle community. The discussion shed light on many things CFOs can expect during the process, from assembling strong internal and external teams, to building relationships with the buyside and sellside, and preparing for life as a public company CFO.
Establishing Goals & Timeline (18-24 months out)
Remitly had carefully identified certain company milestones they wanted to reach before going public. Then COVID happened. While the global pandemic forced many companies to halt or delay their IPO, Remitly actually accelerated their timeline:
“COVID accelerated the shift to digital remittances, and we more than doubled our revenue in 2020. That, along with the other internal milestones we had achieved, meant we were ready to set the course for an IPO.”
With a target IPO date set for a little over a year away, Susanna leveraged her prior IPO experience at Apptio and began working on a plan to get Remitly IPO-ready.
Assessing IPO Readiness (12 months out)
First, Susanna engaged an accounting and auditing firm to perform an IPO readiness assessment. This would help determine where Remitly had gaps and ensure they had the right systems and processes to prepare for the IPO transition.
Doing an IPO readiness assessment early is something Susanna strongly recommends, especially for companies that have complex accounting needs. “Remitly is a global regulated business with a high volume of transactions, so there’s a lot of complexity,” she explained. “When you’re in high growth mode, you don’t necessarily anticipate all the work that is going to be needed on the accounting side of the house.”
Key Hires and Board Development (6-12 months out)
Next, Susanna focused on ensuring Remitly had the right internal teams for the IPO transition and beyond. She created a project manager role to run the IPO, which she found incredibly helpful. “That person was responsible for building a project plan and relentlessly tracking against it,” she says. She also hired a leader to specifically focus on SOX compliance – which was another key area that CFOs shouldn’t underestimate.
Susanna advised CFOs to take a broad look at their organizations before going public:
“Get the right people on the bus as soon as you can and think about your needs two or three years down the road. For each person, ask yourself ‘can this person scale and do they have experience leading large teams?’”
Board readiness is another key focus area for CFOs in the early IPO phase. Pay particular attention to your three board committees, and the Audit Chair specifically. “Filling the Audit Chair role can take longer than expected because you want someone with the right qualifications and financial experience that will also be valuable on an ongoing basis. Finding someone with deep experience as a CFO helped us flag some gaps on the accounting side early on in the IPO process.”
Syndicate Building and Investor Relations (6-12 months out)
Susanna and her team spent a lot of time developing relationships with the investment banks, not only for the purposes of syndicate building but to be leveraged as valuable advisors throughout the IPO readiness process and beyond.
“It’s important to establish relationships with the banks and individual analysts. Often it’s an individual analyst or advisor that’s delivering the most value in the IPO.”
On the buyside, Susanna also recommended engaging with investors as early as possible in order to help develop your pitch and generate interest in the IPO. “You don’t have to share financial metrics like revenue and profitability,” said Susanna. “Focus more on the market opportunity, showing momentum, and why your business stands out from the rest of the market.”
Susanna also found hiring an outside investor relations firm to be very valuable, not only for helping to craft Remitly’s story but also for providing support in negotiations with the bankers.
Preparing for the IPO Structure (final 6 months)
The six months prior to Remitly’s IPO were a grueling sprint for Susanna and her team. They oversaw and influenced the mechanics of Remitly’s IPO, from pricing, share allocation, and establishing the lockup structure, to engaging with the buyside. Additional hires were also brought on to help support financial reporting, accounting, and investor relations. In hindsight, two things stood out to Susanna about that process.
First, it’s important to spend a lot of time thinking through what business KPIs you’re tracking internally and planning to share externally.
“You have to be thinking around the corner about how KPIs are going to trend over time and what sort of questions you are going to get from shareholders. Use the industry comps from your bankers, but also think about what metrics are going to tell the right story to your investors as opposed to generating unnecessary noise.”
Second, it’s important to take the time to educate your employees about the impact of the IPO. “We found that there was a lot of confusion around equity and tax consequences, and so we started doing options 101 training and educating our teams on how their options and RSUs work. All of that is really important for morale and minimizing attrition.”
Going Public vs. Being Public
Susanna concluded by highlighting that while so much emphasis is put on the IPO process, CFOs should also prepare for how their role will change when they reach the public markets.
“In my opinion, being public is harder than going public.”
Susanna explained how much of her time is spent reviewing SEC filings, generating 10-K and 10-Q reports, and generally dealing with “the hamster wheel of earnings.” During open windows, sometimes 25% of her time is spent dialoguing with investors, something she only had to do as a private company CFO during fundraising events.
Six months after Remitly’s public market debut, Susanna is squarely focused on the next phase of growth for Remitly, ensuring it has the people and organizational structure to continue to thrive in the public markets.
Discover more pearls of wisdom about IPO readiness from battle-tested CFOs in our IPO Readiness Guide. If you’d like to participate in future discussions like this one, we encourage you to apply to join The Circle.