Citi Perspectives 2024 E-commerce Edition

8 | Services Citi Perspectives At the Center: Why treasury is critical before, during and after IPO Ringing the opening bell when your company lists on a stock exchange is an exciting moment. It’s the culmination of months of preparation and years of hard work to build a track record of consistent revenue and growth. The tentative recovery of investor appetite for new share sales, a handful of successful debuts in 2023 and 2024, and growing market momentum, means many private companies are dusting off their IPO plans. While the focus during the IPO process is on explaining to investors a company’s unique value and how it is differentiated from competitors, typically with the CEO and CFO center stage during roadshows, many of the processes that underpin those efforts start much earlier. It is the treasury function that undertakes the important range of tasks that are essential to paving the way for a successful listing. Fast-growing companies — especially those heading for an IPO— have a host of competing resource demands. Certainly, there is pressure to invest in revenue-generating functions, such as sales and product innovation. Operational investments — and in particular the creation or expansion of a treasury function —may end up well down the list of priorities. But this could harm not just the IPO but the long-term growth trajectory of the company. Treasury is at the heart of multiple processes and policies relating to governance, transparency and accountability that are necessary to meeting reporting, regulatory and compliance requirements, and to building trust among prospective investors.