Nice write up and analysis! I dabbled in fintech for a bit over the past 12 months and found two limiting factors: Lots of competition which then leads to cut-throat pricing and lower margins. As you write, there is a potential path to consistent profitability if they get SGA and operating expenses lower. One positive dynamic is growing immigration (legal or illegal does not matter) to developed countries in the Americas and Europe. These are RELY's potential prime customers of the future. Cheers!
1- Can you please share how Remitly sends money, does money move across borders unlike wise? How they actually send money abroad, using same correspondent old banking system or they have developed their own infrastructure?
2- Their take rate is 2% even for digital transfer vs wise of 0.7% and overtime, cash pickup and other Remitly solutions would move digital as well. In 2060, more money would move digitally than cash, then how come they earn money from dying engine?
Nice write up and analysis! I dabbled in fintech for a bit over the past 12 months and found two limiting factors: Lots of competition which then leads to cut-throat pricing and lower margins. As you write, there is a potential path to consistent profitability if they get SGA and operating expenses lower. One positive dynamic is growing immigration (legal or illegal does not matter) to developed countries in the Americas and Europe. These are RELY's potential prime customers of the future. Cheers!
Yes, immigration a factor
this is a bit nit picky but technology/overhead would need to be reduced to 15% total, not 10% each to get to 20% operating margins.
gross margin 60%
marketing 25%
technology 10%
overhead 10%
operating income would be 15%
Good catch, let me revise
i can get out of investment banking, but i can never get investment banking out of me...
LOL
how do you view stock based comp in general and in this case? feels high at 15% ish now. when does it become a deal breaker for you?
Thanks a lot for sharing.
1- Can you please share how Remitly sends money, does money move across borders unlike wise? How they actually send money abroad, using same correspondent old banking system or they have developed their own infrastructure?
2- Their take rate is 2% even for digital transfer vs wise of 0.7% and overtime, cash pickup and other Remitly solutions would move digital as well. In 2060, more money would move digitally than cash, then how come they earn money from dying engine?
your guidance would be appreciated.