EcoVadis has been working with Eight Advisory on an IPO readiness program ahead of a possible IPO in New York by 2025-26, co-founder and co-CEO Frédéric Trinel said.
The French provider of sustainability ratings is reviewing financial structuring, cybersecurity, and other compliance aspects necessary for the listing, he said, declining to give further details.
There is a “strong possibility” that an IPO would be the preferred exit strategy for the company’s shareholders, he said. In 2022, Trinel told this news service that EcoVadis was mulling a potential IPO in three to four years.
The next step for EcoVadis is indeed an IPO, but for now, it needs to upgrade the quality of its financial reports and reach the requirements needed for a listed company.
Eight Advisory was mandated to reach those financial transparency standards, a source familiar said.
EcoVadis has a score of 49, according to Mergermarket's Likely to Exit (LTE) predictive algorithm.*
The company hopes to reach EUR 150m in annual recurring revenue (ARR) this year and it could be potentially as high as EUR 160m. The business consistently registers around 45% annual growth so it hopes to have approximately EUR 300m in ARR around the time of the planned listing, Trinel said.
French unicorns like EcoVadis are natural candidates for IPOs and the business is being floated as a possible future listed company, but it is too premature to speculate, a French ECM banker said.
Last November, the French government pledged to reach ten French unicorn IPOs by 2025, including two with a valuation above EUR 5bn. In February 2023, EcoVadis confirmed its spot in the 2023 edition of the French Tech Next 40 government program dedicated to support French start-ups perceived as future global leaders in tech.
Among other French unicorns seen as likely IPO candidates are French AI-based digital experience analytics firm Contentsquare, as well as French online and mobile platform for booking medical appointments Doctolib, which were both previously reported as exploring listings as early as next year.
Nasdaq on the map
“Although we are not decided yet, Nasdaq is potentially what would make the most sense for us, as there is a strong tech/SAAS investor based over there and we aim to make our brand and our standing stronger in North America”, Trinel said, adding that the business could though still opt for a European IPO. The co-founder has already named New York as a likely listing venue in a previous interview.
Fellow French tech unicorn Contentsquare has also hinted at a US listing when discussing plans with this news service.
A New York IPO though might not be the most viable option for the business, said one ECM banker who encouraged the company to give firm consideration to a European IPO.
The Paris-based company has a resilient business model, sustainability ratings being a very defensible growth story with long-term customers and a different spin on the ESG category, they said.
“Their business model is an interesting crossover of sustainability, technology and data, and there is an audience for it in Europe,” this banker added.
In November 2022, GP Bullhound invested in EcoVadis during a USD 500m funding round led by General Atlantic and Astorg, alongside Princeville, GIC and Blackrock, as reported.
This brought total investment in EcoVadis to over USD 735m since its launch in 2007.
Established in 2007, EcoVadis has offices in 11 countries across North America, Europe and Asia. The company is “on fire” when it comes to growth prospects, especially in jurisdictions such as the US and Japan, a source familiar told this news service last month.
Eight Advisory did not reply to a request for comment.
*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.
