Private: Blog & Partner News

Summary

• Cash App’s expanding ecosystem and growth can provide a runway for Square to accelerate revenue growth.
• Even with Bitcoin’s massive 74.1% contribution of Cash App revenues, it has a razor-thin 2% gross margin – equal to the service fee.
• Services/subscription revenues contribute a massive ~78% of gross profit, and with a high ~85% gross margin.
• However, high growth in Bitcoin revenues signals more engagement and volume of Bitcoin transactions, which is likely to drive multi-function growth.
• Such multi-function growth provides incrementally more gross profit and drives service revenues higher, due to more monetization outlets.

Although Square’s (SQ) original focus was on merchant services and mobile micro point-of-sale hardware facilitators to drive transaction-based revenue, the company has arguably created a peer-to-peer payment warrior through Cash App, rivaling PayPal’s (PYPL) Venmo. While it’s hard to discount the broad range of merchant and payment management services that Square offers and recovery in merchant-generated revenues after a slump with lockdowns at a cost of SMB closures, Cash App has transformed itself into the current primary ‘value creator’ and driver of revenues. Cash App’s expanding ecosystem and growth can provide a runway for Square to accelerate revenue growth in the wake of recovery on the merchant side.

Cash App’s Rapid Growth​

Cash App has quickly caught up to Venmo, reaching over 30 million monthly active users during Q3, which could have potentially climbed up to 36 to 38 million MAU through Q4. Estimating that daily actives sat around 4 million for Q3 ’19 (suggesting just over 22 million monthly actives on a share of 18%), monthly actives for Q3 at nearly 8 million and 23% share would estimate over 34 million MAU for Q3. Cash App continues to scale and see significant downloads, about 52 million for 2020, placing it at the sixth-most downloaded app in the U.S. over the course of the year.

https://seekingalpha.com/article/4404162-squares-cash-app-transforming-behemot

SAN DIEGO – November 12, 2020 Applied Data Finance, LLC (ADF), a leading technology-enabled lender and asset manager, announced today that it has closed a $14.2 million capital raise led by existing investors. The capital was raised through the issuance of convertible notes that, at the purchaser’s election, can be converted into preferred stock of the company. The notes mature in July 2023.

Through its Personify Financial online lending platform, ADF provides unsecured personal loans to consumers often overlooked by traditional financial institutions. This new capital will drive ADF’s continued growth and allow the company to serve more underbanked individuals in need of straightforward, affordable loans.

“Finalizing this capital deal in a difficult economic environment demonstrates the strength of the platform and positions ADF to be successful in 2021 and beyond,” said Krishna Gopinathan, Co-Founder and Chief Executive Officer of ADF. “Our ability to select economically resilient consumers has enabled the creation of a solid loan book built to grow profitably in virtually any economy.”

Founded in 2014, ADF and its partner bank have together lent over $560 million to 160,000 consumers and has grown to almost 300 employees with offices in San Diego and Chennai, India.

Earlier this year, ADF ranked #8 on The Financial Times’ The Americas’ Fastest Growing Companies 2020 list and second overall in the Fintech category. Inc. Magazine also ranked ADF #345 on its annual Inc. 5000 list. These lists are considered the premier recognition of the most successful independent small businesses.

About Applied Data Finance ADF, through its Personify Financial brand, is the trusted financial partner for thousands of underestimated under-banked consumers. Combining state-of-the-art technology and world-class application of advanced data science and machine learning, ADF is setting a new standard for assessing non-prime borrower credit and fraud risk. Learn more at www.applieddatafinance.com and www.personifyfinancial.com.

Contact For Applied Data Finance
Katie Killip +1 (212) 850 5620
Katie.Killip@fticonsulting.com
https://www.applieddatafinance.com/news/