By: Anthony Onwukwe & Anita Ibhanesebhor
The journey from a Series C funding round to an Initial Public Offering (IPO) is a defining phase in a startup’s lifecycle. At this stage, a company has demonstrated strong market traction, a scalable business model, and substantial revenue growth. The primary focus shifts from rapid expansion to profitability, operational efficiency, and regulatory readiness. Companies entering this phase must navigate complex financial and strategic decisions, including attracting institutional investors, strengthening corporate governance, and ensuring legal compliance. This article explores the intricacies of Series C financing, the role of private equity firms and investment banks, legal considerations, and the trade-offs between IPOs and acquisitions, the importance of ESG standards and lessons from successful IPOs , aimed at providing insight into trajectory of a startup from a Series C stage to ringing the bell of a stock exchange.
What is a Series C Round?
A Series C funding round is typically raised by companies that have already achieved product-market fit and are scaling aggressively. At this stage, startups have strong revenues, established customer bases, and clear paths to profitability. Investors in Series C rounds include late-stage venture capital firms, private equity (PE) firms, hedge funds, and strategic corporate investors looking for stable yet high-growth opportunities.
Series C rounds are significantly larger than earlier-stage funding rounds, often exceeding $100 million in exchange for significant equity stakes, typically ranging from 10% to 30%, depending on the company’s valuation and growth patterns and prospects. For instance, Flutterwave, an African fintech giant, raised $250 million in its Series C round in 2022, bringing its valuation to over $3 billion. Similarly, Andela, a tech talent marketplace, secured $200 million in Series E funding in 2021, highlighting how late-stage funding rounds are used for market expansion and acquisitions. Investors at this stage demand lower risk, which means they expect clear financial reporting, robust growth strategies, and a structured path to exit — often via an IPO or acquisition.
What is an IPO and Its Implications?
An Initial Public Offering, at its core, represents the seminal moment when a privately held company transitions its ownership structure by offering shares of its stock to the general public for the very first time. This act of “going public” is a carefully orchestrated process, typically managed by investment banks acting as underwriters. These financial institutions guide the company through the complexities of valuation, regulatory compliance, and the actual sale of shares to institutional and retail investors. The IPO marks a significant departure from the company’s private existence, opening it up to the scrutiny and opportunities of the public market.
The implications of an IPO for a company, especially one that has reached the maturity indicated by a successful Series C funding round, are multifaceted and profound. Having already secured substantial capital through earlier private investment, a Series C company embarking on an IPO typically possesses a proven business model, a significant market presence, and a clear vision for future expansion. However, the shift to public ownership introduces a new paradigm of operational and financial responsibilities. One of the most immediate implications is the intensified regulatory scrutiny. As a public entity, the company becomes subject to stringent reporting requirements mandated by securities regulators and stock exchanges. This includes regular and detailed financial disclosures, adherence to specific corporate governance standards, and the prompt reporting of any material information that could influence its stock price. These obligations necessitate a robust internal infrastructure and a significant investment in compliance functions.
Furthermore, an IPO brings about a dramatic increase in transparency and public scrutiny. The company’s performance, strategic decisions, and even its internal culture come under the constant evaluation of investors, analysts, and the media. This heightened visibility demands proactive investor relations efforts and the ability to effectively communicate the company’s narrative and financial performance to the public. While this transparency can build trust and enhance brand reputation, it also exposes the company to potential criticism and market volatility. The potential for stock volatility is another significant implication. Unlike private equity, public stock prices are subject to a myriad of market forces, investor sentiment, and macroeconomic conditions, which can lead to significant fluctuations, potentially creating pressure on management to focus on short-term results to satisfy shareholder expectations.
For a Series C company contemplating an IPO, the decision represents a strategic leap towards accessing larger pools of capital for expansion, acquisitions, or debt reduction. It also provides liquidity for early investors and employees who have been instrumental in the company’s growth. However, this transition requires meticulous preparation. The company must have a well-defined equity story that resonates with public market investors, a strong and experienced management team capable of navigating the complexities of a public company, and robust financial systems that can meet rigorous reporting standards. The journey from a successful Series C to an IPO is not merely a financial transaction; it is a fundamental transformation in how the company operates, is governed, and interacts with the broader financial world. The examples of companies like Jumia and the potential IPO of Kuda Bank, both having likely passed through significant private funding rounds akin to a Series C, illustrate how this transition can unlock substantial growth opportunities and elevate a company’s profile on both regional and global stages.
IPO vs. Acquisition
For a company that has successfully navigated the complexities of growth and secured substantial funding through rounds like Series C, the ultimate exit strategy often crystallizes into a pivotal decision: pursue an Initial Public Offering to tap into the vast capital markets or opt for an acquisition by a larger entity. While both paths represent a culmination of years of effort and investment, they offer distinctly different outcomes and implications. Acquisition, as exemplified by Stripe’s acquisition of the Nigerian fintech powerhouse Paystack, presents an appealing route for many startups by providing immediate liquidity to founders, employees, and investors, while also sidestepping the often arduous and regulatory-intensive process of going public. This allure of a faster, more predictable return, particularly for late-stage venture capital and private equity firms who may have negotiated favourable exit terms, often tilts the scale towards mergers and acquisitions as the preferred exit mechanism. The trend observed in the market, despite notable IPOs like Klavivo, Cava, and Nextracker in the same year, underscores this preference for expediency and reduced burdens associated with being acquired.
However, the path of an IPO, though potentially more demanding in the short term, unlocks a unique set of long-term advantages that an acquisition cannot replicate. Foremost among these is the potential for significantly greater brand credibility and market visibility. Becoming a publicly traded company elevates a startup’s profile on a global stage, enhancing trust among customers, partners, and potential future employees. Furthermore, an IPO provides direct access to a substantially larger pool of capital through the issuance of shares, enabling the company to fuel ambitious expansion plans, invest heavily in research and development, and pursue strategic opportunities with greater financial flexibility. The journey of Safaricom on the Nairobi Securities Exchange vividly illustrates how IPO proceeds can be leveraged to solidify market leadership and drive operational growth.
While acquisitions offer a relatively swift and often lucrative exit, they inherently involve a loss of independence and strategic control. The acquired entity becomes integrated into the larger organization, potentially diluting its original vision and culture. In contrast, an IPO allows the company to maintain its autonomy, pursue its long-term strategic objectives independently, and cultivate its unique identity in the public market. The remarkable value appreciation witnessed in the stock performance of companies like Amazon and Tesla post-IPO serves as a testament to the immense wealth creation potential that can be realized over time by remaining a publicly traded entity. This long-term value creation not only benefits the initial investors but also allows the broader public to participate in the company’s future success.
Ultimately, the decision between an IPO and an acquisition for a company that has reached the maturity of a Series C stage hinges on a complex interplay of factors, including the founders’ long-term vision, the prevailing market conditions, the desires of the existing investors, and the strategic fit with potential acquirers. While the immediate liquidity and reduced regulatory hurdles of an acquisition can be compelling, the enduring benefits of an IPO i.e. enhanced brand credibility, greater capital access, and long-term independence, present a powerful alternative for companies with ambitious growth plans and a desire to shape their destiny in the public market. The choice represents a fundamental trade-off between a potentially faster, albeit less autonomous, exit and the opportunity to build lasting value and influence on a grander scale.
Preparing for IPO: Role of Private Equity Firms and Investment Banks.
As a company matures to the point of contemplating an Initial Public Offering, particularly after the significant milestone of a Series C funding round, the expertise and influence of private equity firms and investment banks become indispensable in navigating the complex journey towards the public markets. Private equity firms, having often been key investors in the late-stage growth of companies reaching Series C, bring not only substantial capital but also strategic guidance honed through years of experience in scaling businesses. Their involvement at this juncture signifies a strong belief in the company’s potential for public market success, and their insights into operational efficiencies, market positioning, and long-term value creation are crucial in shaping the narrative that will appeal to public investors. Firms like Helios Investment Partners and Actis, with their focus on African markets, or global giants such as SoftBank Vision Fund and Blackstone, who frequently participate in multi-billion-dollar Series C and D rounds, provide a bedrock of financial and strategic support, ensuring the company is not only well-funded but also strategically aligned for the rigours of a public listing.
Complementing the role of private equity are the investment banks, which step in as the specialized architects and executioners of the IPO process. These institutions, acting as underwriters, bring deep expertise in capital markets, regulatory frameworks, and investor relations. They play a pivotal role in determining the optimal share pricing that balances the company’s valuation aspirations with market demand, meticulously manage the intricate regulatory filings required by securities commissions, and orchestrate the crucial investor roadshows designed to generate interest and secure commitments from potential shareholders. Global powerhouses like Goldman Sachs and Morgan Stanley, alongside regional experts such as Standard Bank and EFG Hermes in Africa, provide the necessary market intelligence and distribution networks to ensure a successful IPO. The reported engagement of Goldman Sachs and JP Morgan by a company of Shein’s scale for a potential U.S. IPO underscores the critical reliance late-stage companies place on the strategic counsel and execution capabilities of these investment banking partners.
For a company emerging from a successful Series C, the collaboration with both private equity firms and investment banks is a symbiotic relationship that significantly enhances its prospects for a successful IPO. The private equity firm’s deep understanding of the company’s fundamentals and growth trajectory, coupled with the investment bank’s capital markets expertise, creates a powerful synergy. The investment bank leverages the due diligence and strategic groundwork laid by the private equity firm to build a compelling investment thesis for public investors. Simultaneously, the private equity firm benefits from the investment bank’s ability to access a broader investor base and navigate the complexities of the public offering process, ultimately leading to a potentially higher valuation and a more liquid exit for their investment.
In essence, as a Series C company sets its sights on an IPO, private equity firms and investment banks serve as crucial navigators and catalysts. The former provides the strategic direction honed through private market experience, while the latter offers the specialized knowledge and execution capabilities essential for a successful transition to the public market. This collaborative effort ensures that the company is not only financially prepared but also strategically positioned to thrive in the demanding environment of the public markets, ultimately realizing the full potential of its growth and innovation.
The Evolving Importance of ESG and Compliance:
As startups transition from Series C funding toward IPO, the expectations of investors, regulators, and the market evolve dramatically. At this stage, Environmental, Social, and Governance (ESG) factors are no longer viewed as nice-to-haves, they become strategic imperatives, intricately tied to valuation, public perception, and long-term viability. In Africa, where global capital is increasingly flowing into high-growth ventures, investors are prioritizing companies that not only scale efficiently but also do so responsibly and sustainably.
By the time a company reaches Series C, it’s expected to have figured out product-market fit and built scalable operations. Now, the focus turns to institutional readiness: robust governance, risk mitigation strategies, and sustainability frameworks that appeal to both institutional investors and the public market.
Companies like Safaricom have shown how sustainability can be more than a CSR checklist. It can be deeply woven into the corporate fabric to enhance investor confidence. While Safaricom’s sustainability journey spans over a decade, its key lesson for growth-stage companies is the importance of localizing ESG frameworks. This means aligning global standards like the UN SDGs with the unique operational realities and cultural contexts of African markets.
For startups approaching an IPO, this approach becomes essential. A rigid ESG checklist might not apply universally, but a tailored strategy, one that spans across markets and sectors, demonstrates maturity and strategic foresight.
Governance, often the “G” in ESG that’s overlooked in early funding rounds, becomes front and centre by Series C. Companies must establish transparent board structures, formal audit committees, ethical compliance policies, and internal controls that can withstand public and regulatory scrutiny. This is particularly important in jurisdictions like Nigeria and South Africa, where regulatory regimes are tightening and cross-border investors expect global best practices.
The Dangote Group, especially through Dangote Cement, offers a case in point. As a publicly listed company, Dangote has invested in governance reforms and ESG-aligned technologies not just to meet compliance, but to future-proof its operations. Late-stage startups must begin laying these foundations well before ringing the bell on their IPO.
Financial institutions in Africa, such as Standard Bank, now integrate ESG scoring into their lending and investment decisions. For startups eyeing IPOs, this signals a shift; access to growth capital increasingly depends on how ESG-forward their operations are. Standard Bank’s support for renewable energy and economic inclusion initiatives shows that ESG performance is not just about ethics, it’s a new form of creditworthiness.
Series C startups need to recognize that ESG metrics are becoming risk metrics. As due diligence deepens toward IPO, poor ESG scores can delay listings, lower valuations, or even derail investor interest. It signals to the market that a company is resilient, forward-thinking, and built to last.
Lessons from Successful IPOs: What Series C Companies Must Learn
Drawing insights from successful IPOs offers invaluable lessons for Series C companies that are gearing up for the public markets. These companies must begin thinking like public firms long before the bell rings at the stock exchange.
Take Safaricom, whose IPO in 2008 was oversubscribed by over 500%. By the time it went public, Safaricom had already proven its innovation engine with services like M-Pesa. What made it IPO-ready wasn’t just its revenue growth and figures, but the clarity of its value proposition, scalability, and stakeholder confidence serving as pillars that Series C companies must strengthen as they mature.
MTN’s IPO in 1995 similarly illustrates how using a public listing to fund geographic expansion can be highly effective if the groundwork of operational efficiency, governance, and market credibility is already in place. For Series C startups gearing for pan-African or global growth, MTN’s playbook is a strong reference point: build infrastructure, secure compliance, and ensure transparency.
Recent global IPOs also offer critical takeaways. Facebook, Alibaba, and Visa all transitioned to public markets with well-defined revenue models and governance structures. At the Series C stage, companies should emulate these practices by ensuring audited financial statements, legal compliance, corporate governance, and a clear path to profitability. These components are prerequisites to winning the trust of institutional investors and regulators.
Timing the IPO is another strategic factor Series C companies must plan for early. For instance, Beyond Meat’s 2019 IPO capitalized on the plant-based trend, while Swiggy’s massive 2024 IPO rode the wave of demand for digital logistics. Understanding market dynamics and aligning them with your company’s narrative can dramatically improve IPO outcomes. For Series C companies, this means developing internal forecasting models and external market mapping tools early on.
Differentiation and innovation are particularly critical. Whether it’s CoreWeave’s $29B valuation in 2025, driven by the AI boom, or Ola Electric’s success in sustainable mobility, the market rewards clear, compelling stories of future potential. Series C is the stage to double down on R&D, strategic partnerships, and ESG integration, ensuring the company isn’t just viable but visionary.
One often-overlooked lesson is that going public is not the only path. Companies like Stripe have chosen to delay IPOs, focusing instead on private capital rounds to maintain flexibility. For Series C founders, this is a reminder that IPO readiness is a process, not a deadline. It’s about preparing the company structurally and strategically so that when the time is right, be it in a year or five, the transition or exposure to public markets is seamless.
Lastly, post-IPO performance should also be planned for Series C. Jumia’s post-IPO volatility highlights the importance of building resilient investor relations, media management, and long-term financial planning teams before listing. These structures should begin forming during Series C fundraising not after Series C.
The Bottom Line
Navigating the journey from Series C to IPO is a complex, high-stakes endeavour that demands strategic clarity, financial rigour, and organizational maturity. As startups transition from high-growth ventures to public-ready enterprises, they must not only refine their operational models but also build investor confidence and uphold stringent regulatory standards. Whether a company ultimately pursues an IPO or explores alternative exit strategies like acquisition, the decisions made during this phase will shape its legacy and long-term value. By aligning leadership vision with market expectations and executing with discipline, startups can position themselves for a successful leap into the public markets and beyond.