A tech exec explains how it feels to spend 1.5 years preparing for a $226 million IPO, only to sell to PayPal for $2.2 billion

Readly/Magnus Glans

Readly CEO and former iZettle CFO Maria Hedengren.

• Maria Hedengren is the former chief financial officer of iZettle, the Swedish payments company that sold to PayPal for $2.2 billion last year.
• Hedengren had spent a year and a half working on a plan to take iZettle public. The company was just a day away from publishing its IPO prospectus.
• She told Business Insider that the acquisition had been the right decision for iZettle and that she doesn't regret not getting to ring the Nasdaq bell.
  
• Hedengren left iZettle after its acquisition to become CEO of Readly, the magazine subscription service.
• Visit Business Insider's homepage for more stories.

The last 12 months have been white-hot for buzzy tech firms going public.

Uber, Lyft, and Pinterest have all pursued IPOs - not always happily - while Airbnb and Slack are considering following Spotify and doing a direct listing.

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Swedish payments company iZettle was meant to be among their ranks in 2018, floating on the Nasdaq and heralding a robust IPO market for European tech.

European peers such as payments firm Adyen, streaming service Spotify, online fashion retailer Farfetch, and lender Funding Circle all went public in 2018. iZettle began life providing credit card readers that plug into phones or tablets, allowing smaller retailers or individual sellers to take card payments.

Read more:A VC with $575 million to spend lists the 3 qualities startups need to get her funding

iZettle had planned to go public in May 2018 in a float that would raise $226 million, at a valuation of $1.1 billion. In a surprise turn, the company announced that it was being acquired by its rival PayPal for double the amount at $2.2 billion. Such huge "exits" are still unusual in Europe, and it was the biggest acquisition in PayPal's history.

For then-chief financial officer Maria Hedengren, the acquisition put paid to a year and a half of work preparing for iZettle to go public. After iZettle sold, Hedengren left to become the chief executive of Readly, a magazine subscription startup based in Sweden.

Hedengren spoke to Business Insider about what it's like to go from spending months for an IPO to a massive, sudden exit.

She said she doesn't regret the outcome for iZettle, but ultimately felt the job of the CFO at a public company versus the same role at a subsidiary owned by a bigger parent were quite different.

"I've never thought it was a shame it didn't happen, I think the outcome was amazing," she told Business Insider "From a shareholder perspective, the valuation they got was pretty amazing."

Still, Hedengren had overseen a process that involved hiring a syndicate of investment banks to handle the IPO, and a "ton of lawyers."

"An IPO involves the finance and risk departments, the tech departments, communications, almost everybody," she said. "You really need to work with everybody in the business, with lots of training, workshops, and setting new routines. And of course the finance department works hardest in a process like this."

The PayPal acquisition was only announced a day before iZettle's IPO prospectus was due to published, she said. A prospectus is a document filed with the SEC that essentially tells investors about the public offering.

iZettle

An iZettle terminal in action.

This outcome isn't necessarily uncommon, thanks to something called the "dual-track" approach. This involves simultaneously exploring a float or an acquisition.

Hedengren says iZettle had been committed to an IPO, and that PayPal talks began fairly late. iZettle's CEO Jacob de Geer has said the same in an interview. An investor source contradicts this, saying they saw iZettle sale documents while the company was preparing to IPO but concedes serious talks may not have happened until fairly late in the day.

"Some people speculated that we were pursuing something called a dual track, where [you] pursue the process of finding a buyer and work on an IPO simultaneously," said Hedengren. "In fact, we only had one track, and the PayPal discussions were very late in the process, with a very limited time of hardcore negotiations."

iZettle signed a deal with PayPal just two weeks before it was due to ring the bell on the floor of the Nasdaq.

Hedengren says she's still on good terms with the company.

"When iZettle became a subsidiary with PayPal, it's a different situation for a subsidiary to be reporting to an American company, listed or not," she said of her departure. "It's the type of role you play, and how close you are to strategic decisions. The job of the CFO is very different in those situations."

Readly is an earlier stage company, with an 80-person team and around $31 million in funding under its belt. It's ambitious, however, maintaining competition with Apple in the news subscription market. Hedengren said she had planned to take a career break after iZettle to spend more time with her family but couldn't resist the opportunity to lead a fast-growing startup.

Given that Uber, Lyft, and Pinterest have all had rough starts as public companies, is Hedengren glad not to be under that kind of pressure?

"iZettle was the first private company I worked for, actually, so it's just part of the daily work life to be subject to constant scrutiny and the share price going up and down," she said. "Ultimately you have to have a long-term conviction about your strategy."