Global carrier billing company Boku decided to float in London rather than in the US. CEO Jon Prideaux explains why an IPO on AIM was the right choice for growth.

Taking a global view of flotation

Why would a US-incorporated global financial technology company choose to float in London on AIM rather than in the US? For Jon Prideaux, CEO of Boku, it was a matter of scale, understanding and market appetite.

“Coming to the public markets seemed the best way to balance the interests of various stakeholders,” says Prideaux, “but we were not really big enough for a NASDAQ float. We thought we would not get the coverage and would stand out more in London. There was a level of understanding in the London market and appetite from investors.”

Prideaux’s view demonstrates that dynamic international companies like Boku are seeing through out-of-date myths – such as the idea that US listings always deliver higher valuations – that have sometimes fogged the subject. Institutional investors are not bound by national borders – they invest globally. Analysts follow important companies wherever they choose to float and have no problem comparing companies listed on different exchanges.

Jon Prideaux

CEO,
Boku
£45m
raised by Boku in 2017 IPO on AIM

Making mobile phones pay

Boku addresses a major challenge for the world’s online businesses. How can people pay for digital content – like music, movies and apps – if they don’t have a credit card? Boku’s solution is to enable consumers to make payments for goods and services, using something that 5 billion people worldwide do have – a mobile phone account.

Making this simple-sounding idea a reality has required Boku to form partnerships with over 170 mobile network operators in 50 countries, and build a unique billing technology infrastructure.

“Coming to the public markets seemed the best way to balance the interests of various stakeholders. There was a level of understanding in the London market and appetite from investors.”

Expansion on the agenda

Founded in 2009, Boku has become the world’s leading independent direct carrier billing network, with corporate customers including Apple, Google, Facebook, Spotify and Microsoft. It now has more than eight million monthly active users and handles over $1 billion in payment volume in a single year.

“We have always operated as a global business,” says Prideaux. “We have offices in San Francisco, Munich, London, Mumbai, Japan, China, Latvia, Milan, Paris and Sao Paolo. Operationally and culturally, we are not confined to people sitting in the same office in the same place. We operate in 50 countries, in every continent, with the most important regions being Asia, Europe and Middle East, in that order. Markets such as Japan, Taiwan, Hong Kong, Thailand, Malaysia are growing in importance, since our growth strategy is about taking many of our existing customers into new markets.”

Releasing value, enabling growth

The company decided to float on AIM with the dual goal of realising value for existing financial backers and supporting future growth. Boku’s existing venture capital investors – such as Andreessen Horowitz, Index Ventures, Khosla Ventures and NEA – understood the logic of floating on AIM.

Prideaux describes the AIM investor roadshow process as “unbelievably efficient. Within two weeks you can see 70 institutions, basically all on foot. That’s absolutely not the case when you are trying to raise private money.”

Boku’s 2017 IPO on AIM raised £45 million. Around two-thirds of this was passed to existing investors, while the rest is being used by Boku to improve working capital and for business expansion. The company’s market cap is up almost 50% since IPO, at $244 million, and a roster of international institutional investors such as River & Mercantile and Legal & General are investing in its growth.

“We are growing really nicely, exactly in the way we said at the IPO,” says Prideaux. “This remains on our agenda, so watch this space.”

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