Startups are scrambling to recruit seasoned chief financial officers (CFOs) with valuable market experience as they prepare to list their firms in the market.

SUGAR Cosmetics recently recruited Naveen Bhadada as its CFO, tapping into his 19 years of experience. Likewise, The Sleep Company brought on Gaurav Shah as CFO in January. In the last one year, startups such as Captain Fresh, Wakefit, UpGrad, PhysicsWallah, and CarDekho also recruited experienced CFOs in anticipation of possible IPOs.

Though a few of these startups have made their IPO intentions clear, some are quietly building up to it. But there is one thing that is certain—startups actively look for seasoned CFOs as they prepare to move towards public markets.

"Firms are upgrading CFOs with professionals who possess public market experience—bosses who have the ability to craft an engaging financial story to investors and analysts. With the recent IPO boom, firms with ambitious yet well-thought-out market expansion plans require CFOs who can grasp changing business models," quoted Divya Momaya, founder and director of MentorMyBoard.

"The strategy needed for an IPO is very different from that of an early-stage company. Public listing preparation necessitates stringent compliance and financial reporting requirements, requiring seasoned leadership," said Vikram Gupta, IvyCap Ventures' founder and managing partner.

Traditionally, startups have appointed CFOs with an eye for cost savings, focusing on managing cash flows and operational expenses. As a company moves to public markets, CFOs with greater regulatory compliance, investor relations, and market positioning expertise are needed.