This 35-Year-Old Man Was Unemployed When He Founded NerdWallet — A $738 Million Company

Tim Chen, CEO and co-founder of NerdWallet Inc., has come a long way since the 2008 financial crisis when he found himself among the unemployed, like many others at that time.

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After spending four years working in hedge funds such as Perry Capital and JAT Capital Management, Chen received the news of his layoff around Christmas, leaving him devastated. 

“It was super devastating because I’d just been very achievement-oriented my whole life, and I was very concerned with external status and all that stuff," said Chen, a Stanford graduate.

Looking back, Chen considers this setback as one of the most pivotal moments in his life. He credits his ability to learn from failure as essential to his company's success. It turned out to be the catalyst that transformed him into a successful entrepreneur. “I had always dreamed of doing something entrepreneurial, but I never felt I had the permission,” he said.

The idea for NerdWallet struck Chen during his period of unemployment when he had plenty of time on his hands. It all started with an email from his sister, who was living in Australia at the time, seeking advice on finding a credit card with lower foreign transaction fees.

To his surprise, when he searched on Google for relevant information, he couldn’t find anything substantial that wasn’t just marketing or promotional material. Drawing from his own finance experience, Chen conducted extensive research for a week to compile a comprehensive analysis of various offerings from major banks and credit card companies. He ended up sending his sister an Excel spreadsheet outlining her options.

The spreadsheet soon gained popularity beyond his immediate circle of family and friends, making Chen realize the existing problem in financial services — consumers had to sift through complex materials provided by banks without a professional financial adviser, making product comparisons challenging. 

“Your checking account provider might give you a mortgage, a credit card, an auto loan, eventually insurance or wealth management services, and they’ll make something like $50,000 off of you over the course of your life. That’s how the whole system works,” Chen said.

With a vision to bring transparency to online financial services advice, Chen started NerdWallet with just $800 of his own money. He set out to provide readers with the pros and cons of various financial services, answer their questions and offer guidance through articles penned by professional personal finance journalists, all from the comfort of his Manhattan, New York, apartment.

NerdWallets Early Days

The early days of NerdWallet were tough. Chen had to move into his girlfriend’s apartment to save money, and in its first year, the site generated only around $75 in revenue. Chen’s dedication was unwavering — he often worked 16- to 20-hour days, cutting expenses wherever possible.

Despite the difficulties, NerdWallet started gaining momentum in its second year, with visitor numbers and revenue tripling on a month-to-month basis. This progress made Chen abandon any thoughts of returning to Wall Street.

In 2015, NerdWallet secured approximately $105 million in funding, marking a significant milestone. But the company still faced plenty of obstacles, including staff layoffs because of missed profit goals. Chen acknowledged the pain caused by these layoffs but remained optimistic about the company’s future.

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While NerdWallet generates revenue from financial services companies by referring readers to credit cards and similar products, the company emphasizes transparency. Chen ensures that readers are aware of the relationships NerdWallet has with financial institutions, which may influence product reviews and placement on the site but not the recommendations or advice provided.

NerdWallet’s commitment remains focused on the consumers, diligently conducting user testing to understand readers’ financial needs and providing comprehensive content to address their questions. Chen believes that by doing what’s right and building relationships with users, NerdWallet can become a trusted resource.

With an impressive 23 million monthly visitors, the platform is a go-to resource for countless individuals seeking reliable financial guidance. As of today, NerdWallet boasts a market cap or net worth of $738.85 million, showcasing its substantial value in the market. 

The Difficult World of Startups

As shown, the world of startups isn’t easy but can be incredibly rewarding and lucrative. The global venture capital market consistently reaches hundreds of billions invested in top startups around the world. Retail investors even have begun investing into startups on popular platforms like StartEngine and Wefunder. The hardships experienced by Chen highlight the reasons so many startups often fail.