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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 IPO / SPAC super app venture capital

·May. 13, 2019

What Uber’s IPO means for Fintech and Banks

The world is on fire with talk about Uber going public. First, let's talk about who makes money and when. It is becoming a truism that companies are going public much later in their vintage, and as a result, the capital that fuels their growth is private rather than public. The public markets are full of compliance costs, cash-flow oriented hedge fund managers, and passive index manufacturers -- not an environment for an Elon Musk-type to do their best work. Private markets, on the other hand, are generally more long term oriented with fewer protections for investors. This has a distributional impact. Private markets in the US are legally structured for the wealthy by definition and carve-out. As a retail investor, your just desserts are Betterment's index-led asset allocation. As an accredited investor, you get AngelList, SharePost and the rest. I am yet to see Uber on Crowdcube. Therefore, tech companies are generating inequality both through their functions (monopoly concentration through power laws, unemployment through automation), and their funding.

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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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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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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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central bank / CBDC Crypto decentralized finance ICO / IEO IPO / SPAC stablecoins

·Aug. 21, 2020

Decentralized Finance 101 with Kerman Kohli

In this conversation, we go through the essentials of Decentralized Finance with Kerman Kohli, who is a serial entrepreneur and the writer of the DeFi Weekly newsletter. We discuss the mechanics of issuing stablecoins, decentralized lending, decentralized exchange, automated market makers, and the increasing complexity of synthetic assets that have grown the sector to nearly $7 billion in August of 2020.

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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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digital transformation Investing IPO / SPAC macroeconomics mega banks monetization / commercial neobank

·Mar. 22, 2021

Understanding the Fintech user growth behind the $10.4 billion eToro SPAC and coming Chime IPO vs. the melting Megabanks

This week, we look at:

Chime, eToro, and Wise targeting the public markets through IPO and SPACs, and their operating performance
The overall growth in fintech mobile apps, their install rates and market penetration (from 2.5 to 3.5 per person), and whether that growth is sustainable
The implications for incumbents from this competition, and in particular the impact on money in motion vs. money at rest
Broader financial product penetration and an anchoring in how the technology industry was able to get more attention that we had to give

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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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