The founder's story

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THG: the founder’s story

The IPO is a milestone, but founder and CEO Matthew Moulding says that “there have been many, many pivotal moments in our 16-year growth journey.” As with many entrepreneurial stories, key points in the company’s development began happening very early on.

“We started the business as an online entertainment retailer and we used someone else’s technology, trying to acquire customers via Google. Within three weeks it became super-evident that financially our model would not stack up, so one pivotal decision was to build our own technology. We took on two developers on - with money I barely had - and built our own platform. As soon as we did so, our sales doubled. That was an unbelievable moment and it set us on the course that we are on today. We build everything in-house to make it fit for purpose for the specific job of using the internet to get products direct to consumers everywhere in the world. This drives the DNA of the business. And it all started with those two developers – one of them is still with us today. 

A second pivotal moment was the early decision to license the technology. At that point, the reason was simple, says Moulding, “those revenues kept us alive.” Its early customer wins have evolved into THG’s current work with many of the world’s major brand owners, from Homebase to Nestle HSc and PZ Cussons Beauty. “All of this has flowed from that year one decision, which was a complete reversal of our original business model.”

Reasons for the IPO

THG first took on external private investors in 2010 and continued to build upon this. Each year the growth plans for the business and the level of investment required was set against the liquidity requirements of the shareholders, with new investors brought on board. It was a deliberate and personal effort for Moulding. “All our shareholders are relationship-led; none are on the register as the result of a process.”

In 2019, THG made its first move onto the public markets by placing £600m of its debt. “It was successful and I found the process to be useful and positive,” says Moulding.

By the start of 2020, THG had scaled still further. With the majority of its sales being international and growing fast across its markets, THG was the perfect candidate for an IPO. Given the liquidity requirements of his private shareholders, his banks advised THG would require “serious investors” – the same institutions that he would encounter for an IPO.

Encouraged by the success of the debt listing, Moulding decided that this was the year to move from the private arena to a public listing.

“My advisers explained that we could build a cornerstone group of public investors who would back us for the long term,” says Moulding. At the same time, an IPO would take away the exhausting pressure of placing billion-dollar secondary share stakes in the private arena. It could be conducted in a controlled fashion on the public markets.

While Moulding says that THG “could have stayed private,” the IPO “makes total sense. It creates the liquidity, generates wealth for the hundreds of THG staff who own equity in the business, and puts significant capital on our balance sheet.”

Why list in London

It may be a global player but THG is a proudly Mancunian business with 75% of its 7,000-strong workforce based in the UK. Although a listing on London Stock Exchange meant that THG could be true to its roots – an important factor to Moulding - the company was not short of suitors for hosting its IPO.

There was one particular issue of importance to Moulding as the founder. He wanted to continue driving the growth of the company while having a degree of certainty that it would not be a takeover target. The decision was made to list on the Standard Segment of the Main Market, which could provide the necessary flexibility through the ‘founder share’ mechanism.

“We wanted to list in the UK but we wanted to protect the group from takeover. That was super-important to me and to the company. The IPO is the beginning of the next stage of our journey. We are not building something to sell, so the challenge was to have a structure which could support that. London Stock Exchange has been amazing, genuinely great, in being able to support this.”

The next phase of growth

The IPO will put significant capital on THG’s balance sheet. “This will enable us to have immense flexibility as we continue with our growth plans,” says Moulding. “We are growing incredibly fast right now, so you will see us making enhanced investments across our technology and infrastructure on a global basis. We will be creating significant numbers of jobs. We’ll be expanding our beauty and nutrition presence into new territories and with new products.

“The Covid pandemic has accelerated the huge channel shift in global retail towards direct to consumer. We were heading there already but we have now passed the point of no return. There are strong tailwinds behind us. Our IPO is the starting line for a new era.”


Matthew Moulding

Founder and CEO, The Hut Group

See the THG case-study