- Expensify is planning to become a public company as early as next summer, its CEO confirmed to Business Insider.
- The company wants to do a direct listing, rather than a traditional IPO, even if that means it cannot raise money when its shares start trading.
- Expensify doesn’t need additional capital, its CEO says, because it’s been profitable for years. The listing would be intended to allow its employees and investors to cash out their shares.
- Visit Business Insider’s homepage for more stories.
Expensify, a unicorn startup that sells software for tracking business expenses, is weighing its entry as a publicly traded company as early as next summer, and is leaning toward a direct stock listing rather than a traditional initial public offering, its chief executive confirmed to Business Insider.
A direct listing would allow Expensify’s existing shareholders and employees to sell their shares directly to new investors once the company is listed. The business itself doesn’t raise any cash, at least not initially, although the SEC is currently looking into changing that rule.
If the rule is not changed in time for a summer direct listing, that’s OK, says David Barrett, Expensify founder and CEO. The company has been profitable for several years and has “no need for additional capital,” he said.
Expensify hasn’t raised private funding in five years, so Barrett declined to estimate at what valuation the company would achieve in its listing. But he did tell us the company is currently a unicorn, worth more than $1 billion.
The company wants to go public so that some early investors, including OpenView Venture Partners, Nomo Ventures, and super angel Bobby Lent’s firm Hillsven, can cash out, Barrett said.
Expensify has previously taken on debt to buy out other backers like Redpoint Ventures, which led the company’s Series B round in 2010.
By listing directly, companies skip the slog of going around to institutional investors to pitch them on the business before they start trading shares, a process known as a road show. A road show has been traditionally thought of as critical for companies that are not household names. But a direct listing is increasingly being used by companies that are well known in their fields, if not by the general population.
Expensify would be among those with lesser brand-name recognition to go public this way. Asana pulled it off in September, as did Palantir in the same month. Better known companies Slack did the same last year and Spotify the year before that.
One thing Expensify has going for it is that, even though it sells to businesses, its product is used by the many employees at those organizations. The company said in November it has 10 million users.
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