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Wow, it's already been a busy week, and the rumored MoneyLion SPAC hit today!
Just listened to the investor call & here is your deck breakdown:
**A THREAD**
Deck: http://www.moneylion.com/wp-content/themes/moneylion/resources/pdf/MoneyLion-Investor-Presentation-February-2021.pdf
#fintech #finserv #spac
Just listened to the investor call & here is your deck breakdown:
**A THREAD**
Deck: http://www.moneylion.com/wp-content/themes/moneylion/resources/pdf/MoneyLion-Investor-Presentation-February-2021.pdf
#fintech #finserv #spac
2/
Background:
@MoneyLion is, yes, another US #challengerbank
Its feature set puts it squarely in competition with other popular neobanks Chime & Varo
Per @rshevlin's recent survey research, it has <1MM active users
Per @crunchbase, MoneyLion has raised >$270MM to date
Background:
@MoneyLion is, yes, another US #challengerbank
Its feature set puts it squarely in competition with other popular neobanks Chime & Varo
Per @rshevlin's recent survey research, it has <1MM active users
Per @crunchbase, MoneyLion has raised >$270MM to date
3/
OK, let's get started.
Cover slide! Attractive, diverse millennial stock photos.
Pose suggests they're confident, determined - maybe entrepreneurs?
When I hear "Here We Roar" I can only think of @katyperry
(Side note, her inauguration performance was
)
OK, let's get started.
Cover slide! Attractive, diverse millennial stock photos.
Pose suggests they're confident, determined - maybe entrepreneurs?
When I hear "Here We Roar" I can only think of @katyperry
(Side note, her inauguration performance was
)
4/
Positioning "banking" industry as elitist, broken, selfish, impersonal (wow)
MoneyLion is the solution to this elitist, broken world of banking
Note that Metabank provides the backend & MoneyLion's exec team hails from Citadel, Goldman, & Morgan Stanley
Positioning "banking" industry as elitist, broken, selfish, impersonal (wow)
MoneyLion is the solution to this elitist, broken world of banking
Note that Metabank provides the backend & MoneyLion's exec team hails from Citadel, Goldman, & Morgan Stanley
5/
ID its target market as ~100MM Americans = $250B in revenue oppty (TAM)
2020 revenue was $76MM
Plan is to provide a "complete solution" - eg attract users with 1 product (in this case, cash advance) & cross-sell into others.
On the surface, that sounds reasonable enough...
ID its target market as ~100MM Americans = $250B in revenue oppty (TAM)
2020 revenue was $76MM
Plan is to provide a "complete solution" - eg attract users with 1 product (in this case, cash advance) & cross-sell into others.
On the surface, that sounds reasonable enough...
6/
But makes a critical assumptions:
-MoneyLion executes best-in-class (or good enough) products across categories
-that are good enough to convince users to switch from other providers
-and pay $$ for them
The LMI & income volatile segment MoneyLion serves is fee-adverse....
But makes a critical assumptions:
-MoneyLion executes best-in-class (or good enough) products across categories
-that are good enough to convince users to switch from other providers
-and pay $$ for them
The LMI & income volatile segment MoneyLion serves is fee-adverse....
7/
...meaning if there is *another* fintech app that provides a functionality for free, they are more likely to put up with the inconvenience of juggling multiple apps (and even a lower quality product) to avoid MoneyLion's fees.
...meaning if there is *another* fintech app that provides a functionality for free, they are more likely to put up with the inconvenience of juggling multiple apps (and even a lower quality product) to avoid MoneyLion's fees.
8/
Not sure what part of working w/MetaBank is "rewiring banking"
1.4MM accounts - but how many are actually active daily/monthly? How many have recurring direct deposits?
4 month payback suggests low CAC, but doesn't mean that will scale with increased marketing spend.
Not sure what part of working w/MetaBank is "rewiring banking"
1.4MM accounts - but how many are actually active daily/monthly? How many have recurring direct deposits?
4 month payback suggests low CAC, but doesn't mean that will scale with increased marketing spend.
9/
This language of "fee pools" reminds me of when I worked at Goldman Sachs -- viewing the market as groups of potential revenue.
Not exactly a "user centric" lens and definitely not the type of 'elitist' or 'impersonal' way of banking MoneyLion derides on slide 10
This language of "fee pools" reminds me of when I worked at Goldman Sachs -- viewing the market as groups of potential revenue.
Not exactly a "user centric" lens and definitely not the type of 'elitist' or 'impersonal' way of banking MoneyLion derides on slide 10
10/
~6 month from prototype to prod IS an advantage vs legacy banking.
Launching #BNPL and #Crypto in 2021 - a little late on these trends ($PYPL launched both last year)
Crypto can drive lots of low margin revenue (see $SQ)
BNPL will be hard w/o meaningful merchant adoption
~6 month from prototype to prod IS an advantage vs legacy banking.
Launching #BNPL and #Crypto in 2021 - a little late on these trends ($PYPL launched both last year)
Crypto can drive lots of low margin revenue (see $SQ)
BNPL will be hard w/o meaningful merchant adoption
11/
Customer personas - I actually like this. In my time at startups, this is not something we did - was first exposed from experienced brand marketers when building Marcus.
Clearly the influence of CMO Bill Davaris from Ogilivy.
Customer personas - I actually like this. In my time at startups, this is not something we did - was first exposed from experienced brand marketers when building Marcus.
Clearly the influence of CMO Bill Davaris from Ogilivy.
12/
A thoughtful way of thinking of customer lifecycle
On the investor call, made it sound like ML users spent most of the year on the "excess" side
Based on my experience of users of products like Instacash (small-dollar loan), most have structural (habitual) shortfalls...
A thoughtful way of thinking of customer lifecycle
On the investor call, made it sound like ML users spent most of the year on the "excess" side
Based on my experience of users of products like Instacash (small-dollar loan), most have structural (habitual) shortfalls...
13/
...meaning they tend to run a deficit EVERY month, and rely on a short term credit product to plug a gap when they run out of cash each month.
This can be a profitable biz, but is also the "debt trap" that legislators & consumer advocates talk about.
...
...meaning they tend to run a deficit EVERY month, and rely on a short term credit product to plug a gap when they run out of cash each month.
This can be a profitable biz, but is also the "debt trap" that legislators & consumer advocates talk about.
...
14/
It's not clear what % of MoneyLion cust are using Instacash and, if so, how frequently.
Instacash itself is "free," though there is a $4-5 instant fee, even when using Moneylion's own DDA.
Otherwise, 3-5 biz days for external ACH (do they purposely slow this down...?)
It's not clear what % of MoneyLion cust are using Instacash and, if so, how frequently.
Instacash itself is "free," though there is a $4-5 instant fee, even when using Moneylion's own DDA.
Otherwise, 3-5 biz days for external ACH (do they purposely slow this down...?)
15/
This is the crazy one.
A $19.99/month fee in order to get a credit builder loan up to $1k - that still charges interest of 5-30% APR.
Credit unions & CDFIs typically offer credit builder loans (where loan is held in escrow) for *far* less than this.
This is the crazy one.
A $19.99/month fee in order to get a credit builder loan up to $1k - that still charges interest of 5-30% APR.
Credit unions & CDFIs typically offer credit builder loans (where loan is held in escrow) for *far* less than this.
16/
MoneyLion also wants to get in on the investing game.
Haven't read much about this offering, but with no min, no management fee, robo-advice & offering ETFs, at first glance it appears to promote responsible investing for wealth building (not active trading like Robinhood)
MoneyLion also wants to get in on the investing game.
Haven't read much about this offering, but with no min, no management fee, robo-advice & offering ETFs, at first glance it appears to promote responsible investing for wealth building (not active trading like Robinhood)
17/
How ML classifies revenue
Payments: interchange, out-of-network ATM, the $1/mo admin fee
Fees: Instacash & Credit builder
Interest: the APR on those credit builder loans
Advice: investing & affiliate referral (offering other companies' products) revenue
How ML classifies revenue
Payments: interchange, out-of-network ATM, the $1/mo admin fee
Fees: Instacash & Credit builder
Interest: the APR on those credit builder loans
Advice: investing & affiliate referral (offering other companies' products) revenue
18/
AGGRESSIVE growth targets, esp given a saturated market place.
Spending $195MM for 5.5MM users 2021-2023 = $35 CPA
....
AGGRESSIVE growth targets, esp given a saturated market place.
Spending $195MM for 5.5MM users 2021-2023 = $35 CPA
....
19/
vs. a $148 ARPU. Unit economics LOOK attractive, if they're attainable
Depends on how $195MM in marketing $ is deployed, & if they can scale cust acquisition without seeing their CAC increase (and also on what their competitors are doing)
Growing ARPU depends on cross-sell
vs. a $148 ARPU. Unit economics LOOK attractive, if they're attainable
Depends on how $195MM in marketing $ is deployed, & if they can scale cust acquisition without seeing their CAC increase (and also on what their competitors are doing)
Growing ARPU depends on cross-sell
20/
This is the money slide (ha)
-81% of current rev is derived from instant funding fees, 'tips,' & that $19.99/mo credit builder fee
-Interchange, ATM, admin fee only account for 7% of rev
-"Advice" (affiliate) and Interest income from those credit builder loans both are 6%
This is the money slide (ha)
-81% of current rev is derived from instant funding fees, 'tips,' & that $19.99/mo credit builder fee
-Interchange, ATM, admin fee only account for 7% of rev
-"Advice" (affiliate) and Interest income from those credit builder loans both are 6%
21/
-Fee revenue could be at risk if regulatory environment shifts on instant funding/credit builder fee practices & "tips"
-No clear plan in this deck or on the call about how to actually EXECUTE a cross-sell strategy to grow Payments or "Advice" revenue
-Fee revenue could be at risk if regulatory environment shifts on instant funding/credit builder fee practices & "tips"
-No clear plan in this deck or on the call about how to actually EXECUTE a cross-sell strategy to grow Payments or "Advice" revenue
22/
Lot of optimistic assumptions to go from ~$76MM in revenue in 2020 (which cost $270MM in equity investment to date to get to) to $424MM revenue in 2024.
Lot of optimistic assumptions to go from ~$76MM in revenue in 2020 (which cost $270MM in equity investment to date to get to) to $424MM revenue in 2024.
23/
Valuation comparison... ya'll know I am not an equities analyst.
The only company in the "peer" set that feels remotely close is SoFI -- and MoneyLion arguably has a less attractive user base & stronger potential headwinds from competitors + regulatory risk.
Valuation comparison... ya'll know I am not an equities analyst.
The only company in the "peer" set that feels remotely close is SoFI -- and MoneyLion arguably has a less attractive user base & stronger potential headwinds from competitors + regulatory risk.
24/
And that is that. Happy Friday!
Back to top:
https://twitter.com/mikulaja/status/1360225127401746433
#fintech #finserv #spac
And that is that. Happy Friday!
Back to top:
https://twitter.com/mikulaja/status/1360225127401746433
#fintech #finserv #spac
Appendix:
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If you like this thread, you should subscribe - free, once a week on Sundays: http://fintechbusinessweekly.substack.com/
I forgot to plug my newsletter.
If you like this thread, you should subscribe - free, once a week on Sundays: http://fintechbusinessweekly.substack.com/
