From Angel to IPO in Four Years: The Story of PensionBee

In 2017, Deepali Nangia made her second-ever investment in a women-founded company. Today that company (PBEE) sits in the high growth segment of the main market of the London Stock Exchange

By Deepali Nangia

21 March 2022

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 were what I did all day long! And so I did. Little did I know I was sitting across from a woman who would, five years later, IPO her business on the London Stock Exchange.

PS: “There are fewer female CEOs of FTSE 100 companies than there are CEOs called David (six) and even fewer than those called Steve (seven).”

I still remember sitting across from Romi over our first coffee in Carluccio’s, 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.

‘There are fewer female CEOs of FTSE 100 companies than there are CEOs called David (six) and even fewer than those called Steve (seven).’

I spoke to my husband about it. He IS my investment committee. It is well known among my friends that I am known to often wake him up at 5am every day to talk to him about business models and revenue models. His only ask of me at that ungodly hour is a cup of tea before he dives into an intellectual debate with me (after all, isn’t it true that “Intellectual pursuit is the new sex”?)

I have invested in 16 to 18 female founders so far. PensionBee was my second investment. Romi wasn’t one of the women with whom I was in touch 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 start-up 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 adviser called me back. A fund supermarket took my pension, but it 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 found their pensions complex and puzzling. 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 in Carluccio’s with you when you said to me that your valuation was £24 million. 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 £5 million the first time around. I had raised £1 million 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 PowerPoint; 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 I think founders should continue to retain a large stake as they go through multiple funding rounds.

A lot of investors who joined in 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 second round when I met you, we were very close to launching the actual product which we had spent a year developing.

Deepali: During your early years of building the company, when 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 £30 million from angels and a strategic and a family office) – is there a reason you picked this fundraising strategy? Why was venture capital (VC) never a part of it? I often hear from entrepreneurs about minimum 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 VCs approach us but it wasn’t for us.

I had roughly 130 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 others 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 than 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 case 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 women 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 men probably don’t get. And people asked me about who looks after my children and what my childcare arrangements were.

As a woman 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 boy, aged four, and a girl, aged two. As a very high-growth founder, you are almost always fundraising. Over the past 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 men 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.

'I got questions about my approach to family life... And people asked me about who looks after my children'

Deepali: How are you feeling about the IPO? What is 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 vigour.

As a consumer brand, the listing heightens awareness of who we are, especially in an industry that 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.

When I asked Romi her thoughts on exit two years from now, she said that PensionBee would go public. Three years ago on 12 April, Pension Bee raised £55 million, valuing the company at between £346 million and £385 million. 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. Four 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.

This article was originally published by Deepali Nangia via Deepali is an adviser and angel investor in women founders. Her portfolio includes investment in 18 women founders.

The Short Stack

There are fewer women CEOs of FTSE 100 companies than there are CEOs called David (six) and even fewer than those called Steve (seven). Making an angel investment in another woman founder could help that change.

By Deepali Nangia

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