‘Do your homework’: PensionBee’s CFO on making a buzz in the US

Christoph Martin explains how the retirement app prepared for its upcoming US debut, and why the finance function has a central role to play in overseas expansion

240612 Christoph Martin Pensionbee

Most ambitious business leaders dream of their organisation one day making it big in the US. But there are several factors that can make or break such a move, from finding local partners to marketing and product adaptation. It may be the land of opportunity, but it’s a tough market to crack. 

For retirement planning app, PensionBee, successful US expansion has been about extensive planning, research and local insights, says its chief financial officer, Christoph Martin. “You cannot assume that what works for you in one country will do so in another. It’s important to remain adaptable and continuously learning as an organisation. At the same time, you need to stay true to your mission.”

Launched in 2014, PensionBee helps people to prepare for retirement by combining all their old pensions into one platform. It also offers different pension investment plans, including impact investing and fossil fuel-free options. The group currently serves over 250,000 customers in the UK, with £4.4bn in assets under administration as of the end of 2023. 

Having helped to successfully take the London-listed firm public in 2021, Martin is now overseeing PensionBee’s US expansion as it looks to tap into the world’s largest pension market.

He describes what his role as CFO has been in preparing to enter a new market, and offers some sage advice to other business leaders looking to live out their own American dream. 

Do your homework

Successful expansion depends on effective risk management. Entering a foreign market is fraught with regulatory, legal and financial risk so upfront planning is critical, explains Martin. “People generally get very excited about the US and might have a bias for action. But it takes months of meticulous planning. You need to be prepared to do your homework.” 

The CFO approached PensionBee’s own US expansion an almost scientific manner: “First I created a hypothesis for why the business should enter the US, then I tested it to see if I could validate that theory.”

You cannot assume that what works for you in one country will do so in another

Crucially, finance leaders first need to determine whether enough potential exists and whether they’re sufficiently well placed to capitalise on it. Given the context of the “huge US market” – which represents approximately 80% of the global pension market and $22.5tn (£17.7tn) in assets – Martin says there was “tremendous opportunity” for PensionBee’s new US business to become at “least the size of its UK business over the next decade.”

Ahead of its move into the US, PensionBee spent years analysing local economies to inform its pricing policies, while also conducting extensive market research to assess the competitive landscape and better understand customer behaviour. In the course of its research, Martin says the team interviewed thousands of local citizens to learn more about their pension journey, the problems they had and whether or not the market is as under-served as it is in the UK. “We used this opportunity to really listen and see if they voiced a problem that we could realistically provide a solution to.”

He adds: “It’s important to leave any preconceived notions behind about how your product or service might fit in the US. You don’t want to accidentally prompt people in a certain direction, otherwise your hypothesis around the product market fit will be completely wrong.”

When preparing to enter a new market, a business will usually have to hire local talent. For CFOs, this means balancing new regulatory requirements for employment and payments. Getting it wrong can be a cumbersome – not to mention costly – mistake. Martin sought the support of trusted external advisors and local experts to help assist him with this compliance juggling act. 

The same careful planning went into PensionBee’s decision to base its headquarters in New York. There were a number of factors to consider, including access to talent, commercial real estate opportunities and marketing appetite. “The fact that New York has a very vibrant PR ecosystem was particularly important for us as a B2C company,” he adds.

Culture shock

Each new market comes with its own quirks. While the US and UK markets are similar in many ways, there are distinct cultural differences. Successful expansion hinges on the ability to identify these and incorporate them into the product offering, where possible. As Martin points out: “You don’t want to just act like a UK company operating in the US.”

The finance function is standing in the middle orchestrating the entire project

For PensionBee, this meant adjusting to how people in the US think and feel about retirement.“It has different terminologies and people tend to be a little bit more proactive about investing in certain aspects.” 

These were insights provided by PensionBee’s extensive customer research and from hiring a local team. According to Martin, tapping into local expertise provides “numerous benefits for CFOs” who are tasked with ensuring they are creating the most effective pathway to growth — whether it is helping access skills or acting as a bridge to understand the market better as an insider who can help a business to perfect its expansion strategy.

Effective collaboration 

The CFO has a vital role to play in establishing an international expansion strategy. Ultimately, they are responsible for quantifying the opportunity and ensuring the company finds the best way to expand and grow in a new market. 

This requires closer collaboration than usual between finance and the wider organisation to understand what the associated costs are for every function, from marketing and HR through to customer acquisition. “The finance function is standing in the middle orchestrating the entire project,” Martin says. “We have to define what the pricing is, how to acquire customers and what the operating costs are locally.”

Finance chiefs must be prepared to step up and shoulder this additional responsibility, Martin explains, providing clear communication and assurance to the management team and stakeholders on what the expansion strategy needs to be going forward, and making sure everyone is aligned.

Looking ahead to PensionBee’s upcoming US debut, Martin says: “It’s an exciting time for the business. We’ve not yet pushed the button to fully launch, but we’re inching closer.” 

Until then: “It’s up to the CFO to put the company in as strong a position as possible.”