Rising British fintech Pensionbee, sometimes referred to as “the Monzo of pensions”, was the weekend reportedly stepping up it preparation for an IPO. The start-up, founded by ex-Morgan Stanley and Goldman Sachs executive Romi Savova, is said to be close to appointing bankers to run the flotation it believes will value it at a minimum of £300 million.
Based on a projected valuation of at least £300 million, Pensionbee is also talking to the London Stock Exchange about the float being structured in a way that will qualify it for the exchanges exclusive segment for high-growth listed companies. If it succeeds, which involves achieving a minimum market cap of £300 million, it will be regarded as a coup for the young company.
The LSE established the high growth segment of the exchange in 2013. The aim was to attract the rising corporate stars by waiving the usual free-float rules. However, so far it hasn’t been much of a success, with just one current constituent, the Israeli-owned advertising group Matomy, which has lost 95% of its value since listing. One big benefit of being admitted into the segment is that entrants only have 10% of their shares freely floated. The usual standard is 25%.
Pensionbee has been eying a public listing for some time now but plans have been brought forward thanks to the fintech’s particularly strong growth over recent months. Ms Savova has gone public by informing investors and media “we’re actively exploring a listing”. She also confirmed she is seeking bank advisers and hopes to have made an appointment by Christmas.
Pensionbee’s platform and app allows customers to transfer and aggregate any legacy pension pots they may have on a single low-cost platform. The past two months have seen it increase its customer numbers from 15,000 to 115,000 – an incredible rate of growth that means the start-up now has £1.2 billion of assets under administration.
The fintech is not yet, however, profitable, with net losses of £6.86 million booked in 2019 – a doubling from 2018. However, Pensionbee’s potential and current growth rate should mean that does little to dissuade public market investors. While the start-up has not publicly disclosed its valuations at previous private investment rounds, Ms Savova said of a target valuation starting at £300 million:
“I think we are in that ballpark, based on previous funding rounds.”
Founder and CEO Ms Savova is currently Pensionbee’s biggest individual shareholder. While her personal stake has not been disclosed, she and her colleagues currently own 60% of the company. Investment manager State Street Global Advisors is thought to own a little under 10% and a large collection of angel investors, thought to number in their hundreds, own the rest. Pensionbee’s chairman, former UK chief of Prudential Mark Wood, is also a shareholder.
Pensionbee calculates it addressable market of non-aggregated legacy pension pots held on more expensive platforms as worth £500 million. Many professionals leave pension pots from previous jobs untouched because they feel they are too busy to deal with it, or worried that transferring or aggregating them will be difficult.
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