0/ We've seen a number of S1s filed for FinTech IPO's recently including $HOOD $MQ $GLBE $DLO. The co's / their advisors pay for / commission industry reports which we get to be slight beneficiaries of regarding broader macro data points / projections

A few highlights...
1/ Re: $HOOD

"30% of retail investors in the US place orders using a mobile app, according to 2018 FINRA surveys. That number grows to 59% when looking solely at participants aged 18-34."

"Retail investing now comprises roughly 20% of U.S. equity trading volume, doubling in
2/ the decade from '10 to '20."

"~60% of all Americans still do not have investments outside of their retirement accounts, and, an even greater % of young adults aged 18-29—68%—have no money invested in the stock market at all.
3/ "Nearly 2/3 of Americans, would consider purchasing or applying for financial products through a technology company’s platform instead of a traditional financial services provider, and that figure increases to 81% for Americans aged 18-34."
4/ "U.S. retail investors are estimated by Charles Schwab to have total assets of approximately $50 trillion"

"U.S. credit card purchase volume was approximately $3.6T in 2020 & there is an approximately $4T volume opportunity in P2P & micro-merchant payments."
5/ In 2020 @RobinhoodApp "garnered over 1/2 of all new app downloads among mobile investing and trading platforms in the United States."

"Among customers who visited our app in a given day, they did so nearly 7x a day on avg"
6/ Looking at $MQ " $V estimates that from '16-'22, the share of global retail commerce conducted online is expected to more than double from 9% to 19%. Euromonitor projects electronic payments will represent 46% of the total global transaction volume by '25, up from 31% in 2017"
7/ "Bain estimates that because of the effects of COVID-19, the % of global digital tx volumes in '25 will increase from 57% to 67%. According to McKinsey, a half-decade of change has happened in a few months w/ global cash payments dropping 4-5x the annual decline rates."
8/ "Payments are not only becoming more digital but are also integrated more frequently into consumer & business applications. According to McKinsey, 60% of global digital commerce is expected to be made up of alternative payments by 2023."
9/ "According to The Nilson Report, in 2019, consumers & businesses worldwide made over 440B purchase transactions on global network cards, aided by approximately 24B payment cards in circulation"
10/ "There are approximately 300 Acquiring Banks within the United States. However, there are only approximately 200 Issuer Processors globally."
11/ Initiation reports aren't 1/2 bad either. In JPM's $MQ initiation- " $MA & $V accounted for nearly $6T in U.S. consumer & commercial purchase volume in '20."
"$MQ sizes its addressable market opportunity at more than $70T in global commerce & money movement.
12/ JPM sizes the more tangible medium-term volume opportunity at $1-3T annually"
13/ "Although card based payments represent most of non-cash transactions, ACH payments hold the lion’s share (66%) of U.S. volume, measuring ~$64T in '18. ACH has gained 6% since '15, at the expense of checks, while the share of card-based payments has remained steady."
14/ Looking at bank card volume growth trends; credit volume declined for the 1st time since the GFC in 2020, while debit card volume growth accelerated 4% from the prior year to 15% growth in 13 years) as people spent their stimulus payments deposited into their bank accounts
15/ Re: $GLBE "Forrester expects that by 2023, the cross-border e-commerce market will reach $736 billion."
16/ "Global e-commerce is expected to reach $3.9T in sales in 2020, representing ~17% of total retail sales."

"In the U.S., the share of D2C shoppers was just 30% of total online buyers in '7, but is expected to surpass 45% in 2021"
17/ "Global online penetration is anticipated to grow to 21%, leading to ~$5.8T in e-commerce sales by 2023"

"The rise in social media has created a significant marketing channel for merchants to reach new audiences in foreign markets through targeted ads & influencers. $FB
18/ has more than 2.7B MAU's & the top 10 Instagram influencers reach nearly 1.6B potential shoppers. Social media influences the purchasing behavior of ~72% of individuals b/w the ages of 18-34."
19/ Re: $DLO- "In 2020, consumers & businesses worldwide made over 454B purchase transactions on global network cards, according to Nilson Report. The share of e-commerce as a percentage of total global retail payments volume expanded to 21% in 2020, compared to 16% in 2019"
20/ "According to the IMF, in '19 emerging markets represented 57% of aggregate global GDP, a significant increase from 43% in 2000."
21/ " Banking penetration remains low in EM countries, falling below 20% of the adult population in some cases, according to a report commissioned by $GLBE and prepared by AMI."

"As opposed to developed economies where card-based transactions relying on int'l card schemes
22/ are prevalent, local card, bank transfer-based payment methods, digital wallet, & cash-like payments, such as using Boleto in Brazil or UPI in India, and making payments at Oxxo in Mexico, are the predominant payment methods for end users in emerging markets."
23/ "There is an estimated US$1.2T in total e-commerce pay-in & pay-out volume in the countries in which they operate, excluding China. Of the estimated US$428B pay-in volume for '20, 86% corresponded to local-to-local transactions, & only 14% corresponded to XB transactions.
24/ Overall, pay-in volume is expected to grow up to US$1.1 trillion by 2024, implying a CAGR of 27% from 2020 to 2024."
25/ "Payments in emerging markets are still dominated by local payment methods. In Brazil, int'l-enabled credit cards only represented 10% of the aggregate e-commerce payment volumes, whereas domestic-only credit cards & cash-based methods represented 55% & 13% of the aggregate
26/ e-commerce payment volumes in 2020, & the remaining 35% were alternative payment methods."

"In India, int'l-enabled credit cards represented 30% of the aggregate e-commerce payment volumes in 2020, whereas debit cards & bank transfers represented 19% and 14%"
27/ "In Nigeria, int'l-enabled credit cards only represented 13% of the aggregate e-commerce payment volumes in 2020, whereas debit cards & bank transfers represented 28% and 27%."
28/ "Cross-border trade involving developing or emerging economies constituted 53% of global trade in 2017, an ~10% increase over the past 20 years"
29/ "The growing accessibility of the internet, as well as the rising adoption of smartphones, have been important trends in developed & emerging market countries. In 2020, smartphone penetration levels for Turkey, Brazil, & Mexico reached 61%, 80%, and 75% respectively."
30/ "According to AMI, 80 million Nigerians are estimated to come online in the next five years."

"The middle class in EM has been increasing its level of spending & online tx frequency. This group is eager to consume global goods & services previously unavailable due to lack
31/ of access or spending constraints, leading to higher growth rates for goods and services in emerging markets, as well as the associated methods used to pay for them."

"The global middle class would surpass 4B people by the end of 2020. The global middle class is growing by
32/ 120 to 160M people every year, mostly in emerging markets, and is expected to reach 5.3B people by 2030."

"The proportion of cross-border e-commerce transactions relative to total e-commerce transactions was significantly higher in developed versus emerging economies.
33/ In 2019, as a share of all e-commerce transactions, cross-border e-commerce transactions accounted for 30% in Belgium, 27% in Ireland, and 18% in Austria. By contrast equivalent shares in India, Mexico, and Brazil were only 18%, 22%, and 6%, respectively"

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More from @JohnStCapital

6 Jul
0/ Leading FinTech co's are seeing CAC decrease as they scale.

$SQ finished '20 w/ a CAC <$5 & 36M MAUS (up from 24M in '19) while $HOOD saw CAC hit $15 in 1Q21 down from $20 for '20, $32 in 1Q20 & $53 in '19 w/ 18M accounts in 1Q21 up from 12.5M, 7.2M & 5.1M respectively
1/ These customer bases are starting to surpass incumbents: E.g., $BAC has 39.3M "digital users" (12.9M Zelle) while $JPM has 63.4M households, 55.3M digital / 40.9M mobile customers

$SCHW has 32M active broker accounts with $7.4T in clients assets & $IBKR at 1.4M /$363B
2/ The CAC associated with legacy broker accounts has ranged from ~$750-$1,000 while bank accounts ranged considerably from ~$350-$1,500 per @ARKInvest
Read 8 tweets
1 Jul
0/ @RobinhoodApp filed their S1 now that the FINRA settlement is behind them...They have 18.0M cumulative funded accounts, 17.7M MAUs, & $81B in AuC.

They did $522M in 1Q21 revenue vs. $127.6M in 1Q20 and did $958.8M in revenue in '20 reporting $7.5M in net income.
1/ User growth has been astronomical over the past 2 years.

They finished 2019 at 5.1M accounts & added 5.5M funded accounts in 1Q21 alone.

This account growth has also corresponded with an increase in revenue / funded account almost doubling during that period
2/ How did COVID-19 impact trading? Look at the DAU / MAU ratio from 2018-2019 to 2Q20-today.
Read 11 tweets
1 Jul
0/ $BTC "closed" June (6%) its third consecutive lower month for the first time since 6 straight months from August '18-Jan '19.

It finished 2Q down (40.4%), the worst on record & only the 2nd ever negative 2Q (which historically had been the best Q of the year).
1/ $BTC realized cap (or theoretical cost basis) closed the month at $19.4K or down (1.7%) the first negative month since March of '20 and only the 6th negative month since Jan of '19.
2/ $BTC spot price vs. realized cap closed at an ~80.6% premium which is in the top ~40% all time.

Looking it as a ratio of market value / realized cap were <2.0x for the first time since Sept
Read 9 tweets
30 Jun
0/ @RobinhoodApp received a record $70M in penalties for "supervisory failures" & the suit provided us insights on their growth:

31M accounts (18M funded as of 1Q21) median age of 31 / acct size $240 (avg acct was $5,000)

In Feb during Vlad's testimony they cited 13M customers
1/ During 1Q they generated ~$330M in PFOF of which options were ~$197M (60%), Non-S&P 500 stocks were $126M (38.1%) & S&P 500 stocks were $7.1M (2.2%).

This compares to $90.9M in 1Q20 & $221M in 4Q20.

Given growth in $NSTB (@apexclearing) they probably did comparable in 2Q
2/ What was Robinhood charged with? " Systemic Supervisory Failures and Significant Harm Suffered by Millions of Customers"
Read 9 tweets
30 Jun
0/ JPM published a report looking at private equity ("PE") vs. public equity performance. PE is still o/p public equity, but outperformance narrowed due to fiscal / monetary stimulus, & PE acquisition multiples rising. They use a public market equivalent (PME) measure as a
1/ multiple of invested capital; PME >1.0 = PE outperformance

Re: VC there has been outperformance vs. PME. Since 2010 the gap between top & bottom quartile VC managers has narrowed & bottom quartile VC manager underperformance vs public equity is very modest (bottom left)
2/ Perhaps not surprisingly private credit has the most narrow distribution of returns, while VC has the largest distribution of returns but the highest median return (while private credit is the lowest)
Read 7 tweets
28 Jun
0/ The mkt is showing an appetite for cross-border / EM eCommerce & payments co's. The overall XB B2C eCommerce market is est to increase to $736B in '23 growing is 2x the rate of domestic growth.

Two recent IPO's w/ diff exposure to the theme $GLBE & $DLO are +142% / 138%
1/ Re: $DLO they are exposed to electronification of payments / eCommerce w/ XB eCommerce making up 2/3 of its volume.

They offer 600+ payment methods as well as an FX settlement & management solution, tax collection services, & regulatory compliance, fraud prevention, etc.
2/ $DLO has 338 merchants in 9 fast-growing verticals: retail, streaming, ride hailing, financial institutions, advertising, SaaS, travel, e-learning, & gaming. Customers include $AMZN $NFLX $GOOGL $MSFT $SPOT $FB $NKE $V $UBER w/ a best in-class success rate.
Read 7 tweets

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