Once listed, what’s it like for a public company? We spoke to two CFO’s from Zebit and Aroa - who we recently provided IPO advice for – on what’s worked well, what didn’t and what life is like as a public company.
IPO Overview |
Company: Zebit Inc |
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About: Zebit Inc is a U.S. based e-commerce company which offers financially underserved consumers a large selection of products through an alternative BNPL payment method. |
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IPO Date: 26 October 2020 |
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IPO Share Price $1.58 |
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Total Raised: $35m |
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Market Capitalisation on IPO: $149M |
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BDO was engaged by Zebit to perform the Independent Accountant, Independent Tax Advisor and Auditor role for their IPO on the ASX. |
Interview with Steve Lapin, CFO, Zebit
Zebit is a U.S. based company, why was it decided to list on the ASX compared to other U.S. exchanges?
Management had learned of other U.S. based companies that had listed on the ASX and seen the success of those companies in raising growth capital. After learning more about the ASX and the size, scale, and growth oriented businesses that ASX investors like to invest in, management and the board determined that it was a great option for raising growth capital to scale Zebit. Further, Zebit is a complex e-commerce business with an in-house BNPL solution and the fact that BNPL is ubiquitous within Australia gave us comfort that investors would quickly understand our business and differentiation in the space.
What were the biggest challenges in listing Zebit on the ASX?
There were so many challenges in listing; the key one being COVID-19, which forced a 5 month delay in the listing process and made it impossible for management to physically meet with investors during the road show. One other major challenge was learning about all aspects of the ASX listing process and doing so on a tight timeline all while working through a 17 hour time delay from our key service providers.
What made the process easier?
The key service providers who worked tirelessly to ensure the process was smooth and successful. Our lawyers, accountants, and bankers all worked well together to meet our deadlines.
What advice would you give to a company looking to list on the ASX?
Speak with as many U.S. executives who have gone through the process to help you understand what to expect. Greater expectations around complexity, time management, costs, service providers to use, and what life looks like after listing. You’ll want to ensure you fully understand all responsibilities that come part of your life after listing.
What would Zebit have done differently if it were to go through the listing process again?
Not done it during a pandemic. All kidding aside, outside of a shock due to the capital markets closing in March, I think Zebit ran a very smooth process and there really aren’t many things that the company would have done differently.
How is life as a listed company and what are some of the biggest changes from being a private company?
It is very different from being a private company. The level of scrutiny is greater. The pressure to perform is higher. There is more time required to give updates to the market and generate the necessary appendices than expected. None of this is bad, it simply shifts priorities.
IPO Overview |
Company: Aroa Biosurgery Ltd |
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About: Aroa is a New Zealand-based soft tissue regeneration company that is focused on developing, manufacturing and selling regenerative tissue substitutes for medical conditions where impaired healing leads to serious consequences for patients. |
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IPO Date: 30 July 2020 |
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IPO Share Price: $0.75 |
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Total Raised: $30m |
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Market Capitalisation on IPO: $225m |
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BDO was engaged by Aroa to perform the Independent Accountant, Independent Tax Adviser and Auditor roles for their IPO on the ASX. |
Interview with James Agnew, CFO, Aroa
How did you weigh up the decision to remain private or go public?
Going public was a step to provide easier future access to capital for growth and to provide a path for liquidity for long term investors. While other companies delayed their IPO timeline with COVID-19, Aroa listed in July 2020.
What got the IPO over the line in those challenging times?
Within 3 months following the COVID-19 outbreak, we started to see insurgence of secondary listings and investor demand. As a result, we relaunched our campaign to IPO, which proved to be very well supported.
How did you manage the time requirements on the executive team during the listing process whilst also focussing on running the business day-to-day?
The time commitment to the IPO predominantly impacted that of the CFO and CEO. The critical success factor to enable the CFO and CEO to commit a majority of their time to the IPO process, was having a strong management team in place leading up to the IPO that could oversee the day to day running of the business. Of course, much longer hours were demanded from both the CFO and CEO.
How did you prepare for your IPO, and what do you think are the most important aspects to have set up in advance of running a listing process?
The key ingredient to a successful IPO is ensuring you have a strong investment proposition. At a more tactical level, it is important to put in place some of the key disciplines of a Public Company, including good governance and information reporting practices. Having a reputable team of advisors lined up before the starting the process is also critical.
Did the IPO process differ from your expectations?
Despite being a significant investment of time, the process was fairly straightforward.
Now that you are listed, have you encountered any unexpected challenges or benefits that you would highlight to other companies seeking to go public?
For shareholders with large parcels of shares, an IPO is not a liquidity event, rather a path to gradual liquidity.
These interviews first appeared in our ASX year in review. To see the highlights and trends, download the report. If you’re considering an IPO, BDO can help. We have a team of experienced professionals in Australia and across our global network. For more information, contact us.