Expense management software firm Expensify made a big splash on Wall Street in its trading debut after raising $262.7 million in another big tech IPO.
The Portland, Ore.-based startup sold 9.73 million shares priced at $27 each in its initial public offering. In trading Wednesday, the stock opened at $39.75 before closing at $41.06, a 52% jump that pushed Expensify’s market valuation to just shy of $4 billion.
Expensify joined “the growing roster of technology companies that have cashed in on high investor appetite for tech stocks,” Reuters said, noting that “U.S. markets have seen a flurry of debuts from tech companies this year, such as enterprise automation software UiPath and Coupang.”
Founded in 2008, Expensify provides cloud-based software that allows customers to scan receipts from flights, hotels, coffee shops, office supplies and ride shares into their phones and submit a report that gets automatically emailed to the boss for approval and quick reimbursement, sparing them from having to file expense claims manually.
The company claims to have avoided the “costly pitfalls of traditional, top-down enterprise sales and marketing methods” by adopting a viral, “bottom-up” business model that focuses on marketing to employees rather than CFOs. With multiple employees using the software, the employer then purchases a subscription.
“We don’t talk to CFOs about the efficiency gains of their staff and what the payback period is,” Expensify CFO Ryan Schaffer told MarketWatch. “We say to employees that we do expense reports that don’t suck.”
After reporting $88 million in sales and a $1.7 million loss last year, Expensify posted $65 million in sales in the first six months of 2021, an increase of about 60%, and profits of $14.7 million.
“Profit and growth don’t need to be enemies,” Schaffer said, calling Expensify a “rare profitable tech company.”
For the quarter ended June 30, 2021, an average of 639,000 paid customers across 53,000 companies and more than 200 countries and territories used Expensify, according to the prospectus.