Bursts of Color - Yelp's IPO Anniversary

Mar 3, 2022

There's plenty of dark international news this week, but I'm putting that aside briefly to commemorate a special day for Yelp. Ten years ago yesterday it debuted as a public company... meaning it has now been public noticeably longer than private (10 vs 8 years).

Like College Graduation

I think that an IPO for a company is something like college graduation for a young adult. It's a special moment that calls for celebration and reflection. Beforehand there's often community support, with latitude to change directions and make some youthful mistakes. Afterwards you're generally expected to be a grownup and have your act together. And in both cases, it helps to pick the right timing that's neither too early (why cut the fun years short?) or too late (when you're no longer up-and-coming).

For those of you eyeing an IPO sooner or later, the following is some more context about Yelp's experience in those years.

Historical Financials

At the time of IPO, Yelp was close to $100m revenue, growing >80% per year and burning very little cash. We also had pretty good visibility and confidence for the next year, which helped in our first few earnings reports. Here are some annual numbers:

2009 - $25m rev, ($1m) adjusted ebitda
2010 - $48m revenue, ($6m) adjusted ebitda
2011 (1 year pre-IPO) - $83m revenue, ($1m) adjusted ebitda
2012 (1st year public) - $136m revenue, +$5m adjusted ebitda
2021 (1oth year public) - $1b revenue, +246m adjusted ebitda

Waiting for trading to start from the stock exchange floor

Financial Team and Infrastructure

Beyond the business results, we assembled a solid financial team and infrastructure before IPO that included:

Experienced CFO (Rob!) who had seen and done it before
20+ person finance team with dedicated support for Accounting, Tax, FP&A, Payroll, Collections, Financial Systems and Investor Relations
3 years of audited financials
Appropriate board composition with an independent audit chair (would have been better to do this earlier than we did)
Oracle financial system (today Netsuite and Workday also have public-ready options)

Timeline: The Year Before IPO

March 2011 - Decision to put IPO wheels in motion
April 2011 - Began recruiting public-experienced CFO
August 2011 - Rob joins as CFO
September 2011 - Goldman & Citibank selected as lead bankers
October 2011 - "Org meeting" kick-off with bankers & lawyers
November 2011 - S-1 filed, revealing financials for first time
February 2012 - Roadshow to pitch hundreds of investors
March 1, 2012 - Final pricing set and IPO becomes official
March 2, 2012 - Shares trade publicly, Jeremy rings the bell