|
 The cash, an outsized sum for initial funding, will serve as a
signaling device as much as it will help NerdWallet expand, said
founder and Chief Executive Officer Tim Chen.
“I really think that winning in this market is about attracting the
best talent out there,” said Chen about his personal-finance advice
company. “The more talent, the better.”
The funding round values NerdWallet in the mid-hundred millions, a
person familiar with the situation said. Once a company hits a $1
billion valuation, it becomes what Silicon Valley calls a "unicorn."
Since the beginning of 2014, just eight U.S. startups have raised
Series A funding rounds of $50 million or more, according to CB
Insights, a consultancy.
While the San Francisco-based company has already attracted top
engineers and product managers from companies such as LinkedIn Corp
and Twitter Inc, having such a large first check from a top-tier
venture capital firm, IVP, will help it recruit more in Silicon
Valley's tough job market, he said.
A recruiter says the strategy makes sense.
“It’s like a seal of approval,” said Karen Myers, co-founder of the
Talent Farm.
When helping recruit for Lytro, the industrial camera company, the
ability to tout the company's $50 million initial funding round
helped considerably. “It was a big deal,” Myers said.
With a few exceptions, companies generally raise sums in the
single-digit millions for their first serious funding round, known
as a Series A.
Those exceptions include companies with established
revenue-generating businesses, such as developer platform GitHub,
which raised a $100 million Series A in 2012.
[to top of second column] |
NerdWallet, whose competitors include companies such as Bankrate Inc
and Credit Karma, makes money from fees earned by matching consumers
with appropriate financial products, such as credit cards. It is
profitable, Chen said.
The company helps consumers understand how to pick the best life
insurance, say, or financial decisions they need to make around a
major life event such as buying a house or having a baby.
NerdWallet also has a $36 million revolving loan from Silicon Valley
Bank.
Venture firm IVP led NerdWallet's funding round, with participation
from RRE Ventures, iGlobe Partners and others. NerdWallet was
founded in 2009.
(Reporting by Sarah McBride; Editing by Christian Plumb and Lisa
Shumaker)
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