Update: NerdWallet revealed its IPO terms on Wednesday, which now value the company at $1.2 billion. The new valuation is significantly less than what some analysts predicted, though others argued that the $5 billion estimate was too high.

NerdWallet isn’t a typical media company. Unlike its competitors, NerdWallet doesn’t report on the world of finance or stocks. Instead, it focuses on personal finance questions too daunting for most people to answer, like finding the best travel credit card or comparing small business lenders. 

And unlike some other media companies, including BuzzFeed, Vice, and Forbes, NerdWallet is opting for a traditional IPO as opposed to a SPAC, which it announced earlier this month. The company has the financials to back up the decision, with revenue increasing 32% in 2021 after slow pandemic-era growth, likely one of the reasons why it sought a $5 billion valuation initially. The deal would have made NerdWallet worth more than Vice ($3 billion) and BuzzFeed ($1.7 billion) combined.

The San Francisco-based company has also reached record website traffic and headcount amid a push to become consumers’ first choice for financial advice, which was scarce on the internet when the site was first launched. 

NerdWallet was born in the aftermath of the 2008 financial crisis, when CEO and co-founder Tim Chen was laid off from his job at a hedge fund. Chen was bored and looking for work when his sister contacted him with a question about the best credit to get for lower foreign transaction fees. Chen was shocked to find that there wasn’t a website out there that could compare different credit cards, so he spent hours putting together a spreadsheet with an attention to detail that’s become something of a trademark. Chen’s sister sent it around to friends, which got him thinking that there was a real need for a third party platform to help consumers make financial decisions.

That platform became NerdWallet, which Chen started with just $800 set aside for web hosting and software fees. Starting a media company is no easy feat, and in many cases, it’s not lucrative for a while (even if you’re a world-famous site). In its first year, Nerdwallet made Chen about $75, forcing him to move in with his girlfriend until his venture became profitable. 

Year two proved to be more of a success, generating NerdWall more than $60,000 in revenue, but Chen was still hesitant. Speaking about the difficulties of growing the business, he told CNBC that the only reason he stuck to the idea was because of the financial crisis. With Wall Street hardly hiring, Chen guessed that the real opportunity was in running a business. Since then, NerdWallet has grown into one of the most lucrative media companies of its kind.

The company’s business model isn’t exactly like most news sites, either. While typical media sites sell ad space and get more money when more people click on an article, NerdWallet gets most of its revenue through lucrative deals with credit card companies that give the site a cut of the profits when a customer signs up for a card. Chen wasn’t the first to discover this, as rival personal finance site Bankrate had been doing it for a handful of years already. 

The pandemic wreaked havoc on many people’s personal finances, leaving many of them unable to apply for credit cards, causing NerdWallet’s 2020 revenue to sink and company growth to slow. Like many industries in the past year however, NerdWallet bounced back after consumers began spending more, and the site saw record traffic in 2021.

NerdWallet isn’t the only site of kind anymore — Mint, Credit Karma, and Bankrate also aim to answer all things personal finance-related — but it may be the most successful at what it does, at least judging by its revenue and valuation. Bankrate, the closest runner-up, which owns sites like The Points Guy and Creditcards.com and was last valued at $1.6 billion. Red Ventures purchased the company in 2017 for $1.24 billion, making it worth considerably less than NerdWallet, assuming its $5 billion valuation holds steady after its public debut.

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