IPO vs. Private Funding: Why Identixweb Chose to Go Public

While preparing for our upcoming IPO at Identixweb Limited, there have been lots of questions in the air about why we followed the public exit route instead of private. This decision was not made lightly, but rather, after careful consideration of our growth trajectory, business objectives, and vision for the future. Here’s an inside view of the elements that drove us to pursue the public markets.

Exploring the Options: IPO or Private Investment

Before exploring our specific decision, we should clarify the two primary paths for company financing:

In the case of Private Funding you are having capital raised from private equity firms, venture capitalists, angel investors, or private placements. This allows companies to maintain a smaller investor group while staying out of the public eye.

An Initial Public Offering (IPO) (or stock market launch) is a type of public offering in which shares of a company are sold to institutional investors and usually also retail (or individual) investors. That path comes with more regulatory requirement but it also opens the possibility to broader capital markets.

Why Did Identixweb Limited Go for IPO?

Our Shopify Ecosystem Growth Acceleration

Rapid Market Expansion: The e-commerce sector, especially the Shopify ecosystem where we play, is growing exponentially.

Capital to Iterate and Scale: Access to large amounts of capital to iterate and scale rapidly within an expanding market is an advantage of going public.

E-commerce Space Opportunity: The current growth trajectory of e-commerce makes this the best moment to accelerate our expansion.

Starting as of Inception: There is also a competitive edge by virtue of the capital that we raised from our IPO, we can act a lot faster than some of those competitors that could be bound by the constraints of private fundings.

Improved Credibility and Trust in Our Brand

Global Visibility: The listing of our shares on the BSE SME platform enhances our visibility nationally and globally, allowing us to reach new merchants and address their problems.

Signal of Trust: Being a public company sends a powerful message of stability and sustainability to potential clients and partners.

Industry Standing: After being public, we will be able to stand outside the crowds in terms of our solutions and expertise.

Talent Attraction: Outlook visibility and prestige help us attract top talent in a competitive environment who can build apps that are going to be real problem solvers.

Facilitating Early Backers Liquidity

Early Support Should Be Rewarded: IPO provides a true mechanism for early supporters to get what they believed in.

Broader Ownership: Our public markets allow for a broader shareholder base aligned with our long-term success.

Employee Motivation: We are ultimately a people business, and this is of the utmost importance to us. Public status will enhance equity and correlate the value of the shares with the success of the company behind these shares.

Digital Asset Valuation: This builds a transparent market-based mechanism for the valuation of stakeholders.

Market-Based Valuation

Independent Valuation: Public markets offer independent valuation, unlike private funding with negotiation.

Broader perspective: Valuation is a consensus view of many market participants rather than a small group of private investors.

You Don’t See Worst Things: Day-to-day trading leads to constant feedback on our strategy and performance.

Future Fundraising: A public valuation reference point streamlines future capital raising attempts.

Ability to Tap into Larger Pool of Capital

Broader Investor Base: The public markets expose us to both a diversified set of institutional and retail investors around the globe.

Continuous Access: Provides the ability to raise additional capital with follow-on offerings as necessary.

Different Instruments: Unlocks access to alternative financing instruments (e.g., convertible securities) beyond equity.

Lower Cost of Capital: Overall, public companies are able to raise capital at lower costs than private ones.

Transparency Builds Trust

As the rules show, enhanced disclosure reflects our commitment to transparency.

Governance Standards: The public company status brings rigorous governance that ensures the interests of all stakeholders.

Customer Confidence: Customers feel secure with the added diligence and transparency while dealing with a public company.

Share Partner Relations: Suppliers and business partners can have increased confidence in our financial stability and business practices.

Weighing the Challenges

We understand that there are challenges that come with going public:

More Regulatory Scrutiny: As a public company, we will be subject to new reporting requirements and regulatory scrutiny however, this will allow us to be on our toes to stay compliant.

Market Pressure: The public markets can be unforgiving and often reward short-term results over long-term vision. But we as a team consider this pressure as an opportunity to grow.

Public Competition: Our results will be accessible to a larger audience, including competition. On the brighter side, it will make us more competent to work towards more problem-solving apps.

And yet, we see these challenges as outweighed by the benefits and as opportunities to reinforce our operations and our discipline.

It Will Make All the Difference

We did not arrive at our decision to go public overnight. We’ve been getting ready for this transition by:

• Our Corporate Governance framework: Internal control procedures have strengthened.
• Establishing a Track Record: Proving financial consistency.
• Scaling Executives: Hiring executives with public company experience.
• Refining Strategy: Clearly communicating growth plan and use of proceeds.

These preparations have prepared us for a successful transition to public company status.

Forward Vision: The Future of Identixweb Limited Following the IPO

After our IPO, we will refocus on our mission to build Shopify apps that improve how businesses operate within the Shopify ecosystem. The capital raised is expected to be allocated as follows:

• Tech, exploration, development, R&D, innovations
• Expand our talented team
• Enhance our marketing reach
• Accelerate innovation

It is a new era for funding with much less dilution and far more profitability but our commitment is steadfast to provide value to the customers and now the shareholders.

The Bottom Line: A Hub for Future Improvement

There is no doubt about it that for Identixweb being public is more than an event of financing, we certainly aim to be a big player in the domain of applications for e-commerce. Opting for an IPO over further private fundraising demonstrates our conviction in our business model, growth profile, and capacity to create value as a public entity.

As we prepare with excitement for our IPO and welcome new shareholders to join us for the next phase of our journey, we’re energized about the opportunities we have for all of you, our stakeholders!

Frequently Asked Questions

1. Why did Identixweb decide to pursue an IPO instead of seeking another round of private funding?

There were many strategic considerations in choosing the IPO route: accelerate growth in the Shopify ecosystem; gain credibility in the market; provide liquidity for early backers; establish market-based valuation; gain access to larger pools of capital; commit to being transparent to a large and diverse set of stakeholders. These benefits would better align with our long-term visions compared to private funding options.

2. Does this decision mean Identixweb is moving away from its core business model?

Not at all. What going public is about is accelerating the strategy we already have, not changing it. Our focus is still firmly on our core business building applications that improve processes for businesses, specifically focused on the ecosystem around Shopify. The IPO gives us resources to bolster and expand these efforts.

3. What is the primary benefit of Identixweb going public?

The larger benefits are better access to capital, better brand visibility and credibility, liquidity for shareholders, a market-based valuation, a forecast for future funding via secondary offerings, and additional trust from stakeholders through transparency requirements.

4. How will the IPO affect Identixweb’s customers and partners?

Our customers and partners will benefit from increased stability and stronger resources to drive innovation and development. Being a public company will improve our financial position and transparency and that may help reinforce trust in our long-term viability as a business partner.

5. Do you plan to pay dividends after going public?

We are currently focused on reinvesting in growth opportunities rather than return capital to shareholders through dividends. However, like any public company, our board of directors will reevaluate our dividend policy regularly, considering financial performance, capital needs and strategic priorities.

6. What are Identixweb’s long term growth strategy and how does IPO play a role?

The IPO enables us to continue to execute our existing strategy, build out our development, marketing and innovation teams and all with greater capital than we had available to us prior to the IPO. There can be, of course, added responsibility that comes with public status, but it affords new opportunities for navigating strategic partnership, thriving talent and growing markets that are in sync with our vision.