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asset management Investing IPO / SPAC roboadvisor

·Jun. 1, 2021

The $2.2 billion Acorns SPAC and a $50 billion fintech roll-up strategy for public funds

This week, we cover these ideas:

The Acorns SPAC deal, including its valuation and detailed metrics
The growth levers and obstacles for point-solutions as they scale into the millions of users and hundred of millions of revenues
What a $50 billion fund should do to roll this stuff up

It is looking like a pretty good time to go consolidating individual financial product footprints. Leaving aside whether consolidated companies are good or bad for some particular reason, the simple observation is that there are just far too many point-solution brands out there. Too many to be left alone to operate. And now a number of them are going to be public, which means that a number of them are going to be up for sale.

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acquisition IPO / SPAC

·Dec. 14, 2020

The 2020 guide to Fintech SPACs, and how to get them to like you

This week, we look at:

An overdue analysis of the SPAC structure, reflecting on the $75 billion size and stage of the market
Economics and regulatory paths of going public via investment bankers, SPACs, and direct listings
The marquee teams in Fintech looking to do deals, and what criteria for target selection look like

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decentralized finance entrepreneurship exchanges / cap mkts IPO / SPAC monetization / commercial paytech

·May. 17, 2021

Marqeta’s $300MM of revenue & Ethereum’s $20B in ann. transaction fees highlight opportunity and industry structure

This week, we cover these ideas:

How market structure determines the types of companies and projects that succeed
A walk through Marqeta’s economics and business model, and how Square’s Cash App and DoorDash were needed for success
The emerging $10B transaction revenue pool on Ethereum, MEV, and the changes to mining and gas

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central bank / CBDC exchanges / cap mkts ICO / IEO IPO / SPAC stablecoins

·Dec. 2, 2019

Shifting from Institutions to Retail Clients — NYSE direct listings and Central Bank digital currencies

I look at the similarities between the NYSE building out direct listing products to augment or replace IPOs, and Central Banks considering launching consumer-facing digital currencies. In each case, the value chain of the respective financial sector is compressing, as the underlying manufacturers of financial product move closer to the consumer. I also highlight how a few blockchain-native alternatives to trading and rebalancing software are developing, and the reasons to get excited about things like Set, Uniswap, and Aragon.

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digital transformation Embedded Finance IPO / SPAC neobank Open Banking venture capital

·Jun. 27, 2021

The Fintech tipping point is here — Visa’s $2B Tink acquisition, Dave neobank $4B SPAC, and Revolut’s 15MM users in context

The fintech industry is coming up on the tipping point of funding, revenue generation, and user acquisition to rival traditional finance with $20 billion in YTD fintech financing, the several SPACs, and Visa’s $2B Tink purchased. Defensive barriers have eroded.

Let’s take a moment to compare capital. While it is not the money that wins markets, it is the transformation function of that money into novel business assets that does. And while the large banks have a massive incumbent advantage with (1) installed customers and assets, and (2) financial regulatory integration (or capture, depending on your vantage point), there is a real question on whether a $1 generates more value inside of an existing bank, or outside of an existing bank — even when it is aimed at the same financial problem.

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Crypto decentralized finance exchanges / cap mkts Fractals & reflexivity IPO / SPAC

·Feb. 25, 2021

Why Coinbase’s $100B+ valuation makes sense, and how to compare it to $60B Ethereum DeFi, and to crypto-king Binance

his week, we look at:

There are two very large revenue pools in the crypto asset class — (1) mining, and (2) trading. There are some large revenue pools in crypto-as-a-software, too, but those tend to be less sensational.
This analysis will establish a 2021 baseline for the most regulated of crypto exchanges, Coinbase, including a detailed financial model building a $100B+ valuation case
We then consider the valuations and multiples of capital markets protocols in Decentralized Finance of Ethereum, now making up over $60B in token value
Lastly, we look at Binance’s $1B in profits, its $35B BNB token, and the activities on Binance Smart Chain

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big tech China Investing IPO / SPAC paytech

·Sep. 21, 2020

Is Ant Financial the best Fintech in the world? Let’s analyze the IPO!

In this conversation, Max Friedrich of ARK Invest, Will and Lex break down Ant Group’s highly anticipated IPO.

Ant, a spinout from Alibaba and the parent of Alipay, one of China’s leading payments companies, filed papers to IPO in Shanghai and Hong Kong.

Max, Will and Lex dig into Ant’s business, from the origins to today, discuss growth opportunities and potential headwinds and explore the multi-faceted relationships between Ant and other big tech companies and national governments.

We cannot understate how impressive Ant Financial has become, connecting 700 million people and 80 million merchants in China, with payments, savings, wealth management and insurance products integrated in one package. The company also highlights the likely road for traditional banks — as underlying risk capital, without much technology or client management.

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acquisition digital lending Embedded Finance IPO / SPAC paytech

·Jan. 15, 2021

Who wins and loses in the Plaid/Visa divorce, and the $10 Billion in new Fintech SPACs (Spakkt and Spofi), with Will Beeson

In this conversation, Will Beeson and I break down a few important pieces of recent news — the SPACs for SoFi and Bakkt, and Plaid/Visa falling apart.

SoFi is going public with a SPAC deal worth over $8 billion. A few things we touch on in detail: (1) this is still largely a lender, (2) there is a gem of an embedded finance play called Galileo that SoFi owns, and (3) the multiple is a little over 10x T12 revenues, which is not crazy expensive, but not cheap.

Speaking of Galileo and finance APIs, we transition to Plaid, and how it is is not going to be one of the networks in Visa’s network of networks. Who wins and who loses in the equation? And last, we cover the Bakkt SPAC of over $2 billion and our view on its future.

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Crypto Investing IPO / SPAC

·Jul. 13, 2020

How Coinbase Pre-IPO Economics Could Get a $15 Billion Valuation

Coinbase is going to go public.

The news hit Reuters, then Coindesk, and then the rest of the world. It feels like big news! The crypto broker is beating Robinhood, Acorns, Stash, Revolut, Betterment, and Wealthfront to the public markets. It's even beating SoFi, which is trying to get a national bank license (and who doesn't want to own a bank!).

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ICO / IEO insurtech IPO / SPAC philosophy

·Jun. 17, 2019

The Ethics of $2B Lemonade, $100B Softbank Visions, and $500MM of Binance IEOs

I've been seeing a lot of Fintech headlines recently that make me raise my hands in the air, and go "Come on, are you for real!?". I imagine a lot of people feel similarly frustrated by Lemonade looking to go public at a $2 billion valuation on $50 million of revenue, Initial Exchange Offerings on crypto exchanges raising over $500 million this year, Facebook's tone deaf Silicon Valley club crypto money, or SoftBank talking about selling its overpriced $100 billion Fintech unicorn fund in an IPO. So other than getting crankier with age (Happy Father's day everyone!), I want to dig a little bit into the concept of fairness, asymmetric information, economic rents, and how this can help disentangle feelings from thoughts on these news items.

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