Road to the North - part 6: The world is trembling - what does our IPO journey look like now?

This is part six of a blog series following the journey of Witted Megacorp Oy as it explores the possibility of listing on the NASDAQ First North market. The story is told from the perspective of CEO Harri Sieppi. Other parts of the series can be found on the Witted blog.

  • Author:

    Harri Sieppi
  • Published:

Didn't exactly go as planned, now did it? We had a couple of curveballs coming our way, the latest of which was three weeks ago. I suppose such long projects rarely go off without a hitch, but who would have thought a year ago that we would still be suffering significantly from a pandemic and there would be a war in Europe. Markets are turbulent, inflation and interest rate hikes are battering the stock market, and at the same time we started our round of meetings with institutional investors. Yeah, I certainly wouldn't have believed it if someone had told me a year ago.

For me, the start of the war came as a real shock. When I opened the news this morning I roared: "You've got to be kidding me". It took some digesting, but you can't give up. After the shock and taking the child to the kindergarten, things started to happen. Concern for people is an integral part of the job of a CEO and crises of this kind always trigger action in companies, where the company goes through the direct and indirect effects on the business. The main concern is about people, how to make sure that everyone is safe. This is followed by an assessment of the business and the potential impact on it. The process is always the same, and it's the same now.

During the morning I found out that we have one Ukrainian developer who is in the war zone. The team was extremely worried about him, and for good reason. At first we couldn't catch him, but during the day the team succeeded and learned that there was no immediate danger. A huge weight lifted from my heart.

During the day we also went through all our affiliations in Russia and fortunately we have no active business or any projects in Russia. However, two Russian developers are working as subcontractors on one of our projects, so we made sure they were doing well too.

The direct business impact for the company therefore appeared to be minimal. The focus of our team was on the safety of the Ukrainian developer and what we could do for him. The team has done valuable work here, keeping in constant contact and also promising to house the person in their home if they need it. Huge kudos to the people of Witted. Times are tough for all of us, and it's great to see such empathy from our folks in the midst of this crisis.

We've also been asked how all this affects our IPO project, so it's probably worth expanding on that.

Two of the biggest risks why companies withdraw from IPO projects

When we embarked on the project, we also considered the risks involved. In the big picture, there are two reasons why IPOs could fail and why companies sometimes withdraw from them. The first is that the company's business is stalling, focus is shifting to the IPO project and operations begin to suffer. Fortunately, we have not had this problem at any point, business is going as planned and we expect a very good Q1. Another reason is that the market is tanking. Tick that box, in the midst of all this fuss, it is safe to admit that the market has taken a hit and the risk has at least partly materialised.

I admit that I have been doomscrolling through the evening news and social media article after article. I find this very unreal, sad and overall worrying about what's happening in the world right now. I have also noticed that my colleagues have been hit hard by the war that has just begun.

When it storms, continuity creates comfort. We have discussed the situation a lot and in the midst of all this madness we have continued to work because we have no choice and we are responsible for those who work for us. People, loved ones and family are the most important thing, also for our developers.

Playing the long game, no quick wins

Alongside all this, normal everyday life continues. Last week, we sent our prospectus to Nasdaq for comments and did our first institutional investor round. We had a good feeling about this run.

These are dramatic times as the pandemic and war continue. This is not the best possible time for an IPO in general. Still, we continue to have strength in our business. We can redeem the promises of our investor story. Because we are playing the long game, our eyes are much further away than in the coming months.

We had and still have two main reasons for listing. We want our developer community to become shareholders and a listed share that we can use as a method of payment in potential acquisitions. We intend to use the capital for growth and to maintain our rapid growth momentum. The IPO targets will not be dramatically affected in the long term by this recent market volatility. As the objectives set will not be compromised, there are no obstacles to moving forward with the IPO project.

There is a demand for a good company, no matter where the world lies. There was discussion on the Inderes investor forum whether there is interest in new listings as an investment target in the current market. At the time of writing, 80% said they were still interested. In the midst of all this madness, the positive thing is that the IPO market is not congested.

If something dramatic happens that is even more extraordinary than the current situation, we have the tools to take care of it. Among other things, we have the possibility to postpone the timetable somewhat. Right now, it doesn't look like that tool needs to be used. Of course, we must remember that this absurd start to the year has shown that neither I nor anyone else can predict the future.

Our IPO journey has come at an extraordinary time. At the moment, you have to remember what is most important. Keep in touch with loved ones, family and friends. But a job is just a job and in these times the world needs empathy. As a company, it is important for us to do our part, i.e. what we can contribute to. Supporting those who need support, helping our customers, providing jobs for people and making sure that business keeps going even in difficult times. This is the best way for us to shoulder our social responsibility. The world news are bleak, and concern for people casts a shadow over our daily lives. However, we will continue our work. We have no reason to stop at the moment, so we will continue towards the IPO.

The story continues in two weeks again. Follow Witted on LinkedIn, on Facebook or Twitter, and we'll tip you off when new parts come in. This story is also told (in Finnish) as Witted: Matka pohjoiseen - a podcast you can find on podcast services such as Spotify Or Apple Podcasts.