Highland, HPE Growth-backed WeTransfer shelve IPO plans

Wahida Ahmed
28 January 2022

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WeTransfer, a Netherlands-based online file transfer service backed by Highland Capital Partners and HPE Growth Capital, has withdrawn its IPO plans amid pressures caused by a rout in technology stocks, according to Bloomberg.

The company was valued at EUR 716m following the proposed IPO. The company announced last week that it had knocked 20% off its original proceeds target, aiming to raise EUR 125m.

Earlier this month, WeTransfer set its IPO price range at EUR 17.50-20.50 per share, as reported. In a statement at the time, the company said the offer period would kick off on 20 January 2022 at 9am CET, and was expected to close on 27 January 2022 at 2pm CET; the first day of trading would have been on the 28 January on Amsterdam's Euronext.

Morgan Stanley and BofA Securities were acting as joint global coordinators, and ABN Amro Bank and Barclays Bank were acting as joint bookrunners.

Bloomberg reported that the company is now considering other options including M&A and a future listing.

In February 2015, Highland Capital led a USD 25m Series A round for WeTransfer; the investment was intended to grow the company's US presence. Highland also supported the bolt-on acquisition of Paper and Paste in 2018, according to Unquote Data.

In August 2019, HPE led a EUR 35m Series B funding round for WeTransfer, with Highland also participating in the capital raise.

WeTransfer is based in Amsterdam and the US, and was founded in 2009. The data transfer service allows users to share files to enable co-creation. The company also launched a mobile app, Collect, and a sketching tool, Paper. According to LinkedIn, the company employs around 51-200 people. WeTransfer operates across 190 countries and has 387,000 paying subscribers.

In a press release, the company's CEO, Gordon Willoughby, said the company had delivered a revenue compound annual growth rate (CAGR) of 31% from 2018 to 2020, and the company expected revenues to exceed EUR 100m in 2021. Its revenue growth has continued into 2021 with a constant currency revenue growth of 68% year-on-year for the first nine months of 2021. The company reported an adjusted EBITDA margin of EUR 21.3m with cash conversions of 95%. It reported revenues of EUR 72m in the first nine months of last year.

In the first nine months of 2021, European exchanges saw financial-sponsor-backed IPOs reach USD 25.3bn in deal value across 41 listings, compared with just eight IPOs in the first nine months of 2020, as reported.

Elsewhere, IPO plans were withdrawn due to market volatility and uncertainty in the UK due to the effects of the pandemic on many sectors; Brewdog and Hawksmoor paused IPO plans in October 2021, as reported; and ECI's Travel Chapters withdrew IPO plans citing market volatility, as reported. Recently, global private equity firm TPG raised USD 835m in a USD 9bn IPO, as reported.

Elsewhere in the tech space, VNV Global is preparing France-based carpooling marketplace BlaBlaCar, and electric scooter company Voi Technology, for potential IPOs in 2023.

HPE Growth Capital did not respond to a request for comment.