From Angel to IPO in four years — The Story of PensionBee
I met Romi through our friend Chris, an insurance M&A banker. Chris and I were known to often nerd out on insurance accounting and insurance businesses. Romi used to work with him at Morgan Stanley and had recently left to start PensionBee. I was, at that time, running Wild Blue, an angel syndicate and meeting companies was what I did all day long! And so I did. Little did I know I was sitting across a woman who would 5 years later, IPO her business on the London Stock Exchange. PS: ‘there are fewer female CEOs of FTSE 100 companies as there are CEO’s called David (six) and even fewer than those called Steve (seven).(1)’
I still remember sitting across from Romi over our first coffee in Carluccios South Kensington in 2016. In typical investor style, I asked her the valuation. She said £24 million. She didn’t flinch and it didn’t bother her that I might have thought it was high. It was what it was. Either I was in or I was out.
I spoke to my husband about it. He IS my investment committee. It is well known amongst my friends, that I am known to often wake him up at 5am to talk to him about business models and revenue models each morning. His only ask of me at that ungodly hour is a cup of tea in exchange J before he dives into an intellectual debate with me (after all, isn’t it true that ‘Intellectual pursuit is the new sex’?(2)).
I have invested in 16–18 female founders to date. PensionBee was my second investment. Romi wasn’t one of the women who I was in touch with regularly. We got her investor updates and I usually replied asking her if she needed help with anything. Sometimes we would hop on the phone if I had any questions. On the phone, she was always laser focused on her metrics and knew exactly where she was going
I recently spoke to Romi about her fundraising strategy, her trials and her tribulations so all of us women (and men) could be inspired. Here are some snippets of our conversation.
Deepali: What made you start PensionBee?
Romi: I had left Morgan Stanley, had already made the transition into startup life and was working at Credit Benchmark. I had to move my pension from Morgan Stanley and realised it was a huge consumer problem. No advisor called me back. A fund supermarket took my pension, but they had a high charging structure and I found the system really complex. I spoke to lots of people and realised many people faced the same problem as me. They were complexed and puzzled by their pensions. I had identified a consumer problem with a huge market. And realised, that for society, this problem would only grow.
Deepali: I still remember sitting with you at Carluccios South Ken when you said to me that your valuation was GBP24MM? How did you decide on that valuation at that point and what was the general feedback from the market?
Romi: I had moved beyond the business plan at that time. My first post-money was £5MM the first time around. I had raised £1MM at that point. I got exactly the same question even the first time around — why is this number what it is? In my view it wasn’t just a power point, it was about the team. I was building a business in such an enormous market and I had confidence in the strength of the team. That justified the valuation and in my view founders should continue to retain a large stake as they go through multiple funding rounds.
A lot of investors who joined who joined the first round joined in the second round. I wanted to find investors who would support me through my entire journey. I made substantial progress in between each funding round. And during the 2nd round when I met you, we were very close to launching the actual product which we had spent a year developing.
Deepali: When during your early years of building the company did you want to toss everything out and give it all up?
Romi: There were lots of challenging moments but I never felt like that. Every time you make it to the other side, it builds strength and confidence in the business.
Deepali: You have only ever raised from angels (I think over £30MM from angels and a strategic, and a family office) — is there a reason you picked this fundraising strategy? Why was VC never a part of it?
I often hear from entrepreneurs about min. cheque sizes and keeping their cap tables clean. I would love to hear your thoughts on these.
Romi: My approach to fundraising is not common at all. I wanted a funding model and shareholder base that worked for everyone — for customers, for founders and for my employees. We had a lot of VC’s approach us but it wasn’t for us.
I had roughly one hundred and thirty angels on my cap table and I am not sure what ‘too many’ means — it made no sense to me to cap this. I never told investors that I had a minimum cheque size and I have angels who invested a few thousand and I have angels who invested a few million. I had all these amazing people invested in the company’s success and I would never want to limit that. I also had some women on the cap table. While the world of angel investing is nowhere close to being 50–50, I had better female representation that most.
My fundraising strategy varied so much with everyone. When people asked for meetings, we had them, when they wanted a call, I did one. We always had very good feedback on our investor communications and we sent regular updates. For some, they would see the investor updates and simply hit the reply button and say they want to up their commitment or re-invest.
I think it is a good approach to go very broad. Most people are afraid of sharing their idea in that someone might go out and do it — it is a risk but you need to be confident that your execution will be best. I went very broad and I spoke to University friends, ex-colleagues, colleagues of colleagues — we were very welcoming to anyone who wanted to invest. We did not want to create an exclusive club of investors and had a large capital pool as a result of this strategy.
Deepali: Did you ever feel that as a woman, fundraising was hard for you? What advice and tips would you have for other female founders in their fundraising journey?
Romi: Fundraising is hard whether or not you are a woman. I got questions about my approach to family life, which male founders probably don’t get. And people asked me about who looks after my children and what my childcare arrangements were. As a female founder, it is ridiculous to receive these questions but important to know that these questions are on people’s minds.
Deepali: You have two kids and you had them during your time building PensionBee? Did you take maternity leave? Were you ever pregnant and fundraising and how did you deal with your investors at this time?
Romi: I have a little boy, 4 and a little girl, 2. As a very high growth founder, you are almost always fundraising. Over the last five years, it felt like I had either just given birth or was pregnant. I tried to avoid the more heavy parts of fundraising when advanced in my pregnancy. It was always a dilemma, whether to tell people or not. However, it has nothing to do with the company. If male founders don’t have to do it, the same rules should apply to us.
I never explicitly said anything, if people wanted to draw their own conclusions on what was going on with my body, they were free to do so.
Deepali: How are you feeling about the IPO? What next for you?
Romi: I am feeling super good. We have put in many years of course but many more months (leading up to the IPO) of very hard work. We needed growth capital and the IPO enabled us to raise it. We will now execute our plans with even more vigor. As a consumer brand, the listing heightens awareness of who we are, especially in an industry which is completely opaque. We have been able to bring our customers along on our journey and aligned the incentives of our stakeholders. Every employee has an equity stake in the business and everyone is sharing in the growth of the company. Customers and new shareholders have shared ownership. We have also been able to find our new long-term investors/partners who are aligned with our mission and vision. I love this company — and this is currently it for me.
I remember asking Romi her thoughts on exit two years ago. She said that in hew view PensionBee would go public. Three years hence on April 12th, Pension Bee raised 55MM, valuing the company at between 346–385MM. I first invested in PensionBee in February 2017. I followed on investing each time with our last investment into PensionBee in her pre-IPO round in November 2020. 4 years in, from angel to IPO, I am a super happy investor. I am holding on to the stock. I am a believer. A believer in Romi.
A bit about Romi Savova:
Romi grew up in Bulgaria (until 5) and South Africa (until 18). She studied Economics and International Studies at University. She enjoyed playing tennis and reading. She lives in London with her husband Alfred and children Ari (4) and Gia (2). When her kids were little, her mother-in-law lived with them. That helped Romi a lot in the early days of building PensionBee while being a young mother at the same time. I am sure Alfred played no small role in supporting Romi through this journey but would like to very much thank her mother-in law, while I repeat — ‘Behind every successful woman is another woman!’
(1) If you haven’t read it already, please read, https://www.altfi.com/article/7662_the-promised-fintech-ipo-boom-wont-include-many-women
(2) Credit: Check out Finnish startup Sane, if you haven’t already
