Kia Ora!

Well... isn’t this a big ol’ pile of 💩. And not a smiley one either.  

So, I’ll keep this report snipe free! ☮

I’ve been reading a bit about stoicism lately, and while I have a loooong way to go before I can say I am a practitioner, I would highly suggest reading The Obstacle Is The Way by Ryan Holiday. Wouldn’t say it’s a gripping, edge of your seat, page turner, but it has some pretty good lessons around handling difficult times.

On to some good news out of the FinTech and it’s raining green 🤑💰

• Xinja raises $433m ($160m up front with the rest after hitting growth targets)
• Numbers raises $34m  

Great job to both camps! While these deals would have been done (or almost done) prior to COVIDcoming through a full force, it’s a great testament to both Xinja and Numbers that they were able to get over the line.  

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ADI Market Share

You’d have been living under a non-fintech rock if you weren’t aware of Xinja’s deposit grab, so it’s little wonder we saw YUGE growth in their deposits!

Also included this month is Up’s balances from Bendigo Bank’s Half Year Results. We only have the balances as of end of December, as well as their Half on Half growth rate, so have made some straight-line forecast assumptions.  

A little disappointed with the slow growth of Numbers on their lending book, as I like what they’re about. Having done Home Lending (many) years ago, I reckon I could have written $9m in lending in 6 months. I’m not too sure I can see anything drastically changing in this environment, so I’m hoping something got missed in the reporting and they find a few loans under the mattress.

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Credit Cards will be an interesting number to look at over the next few months. If there is any underutilised balances, this is where I would expect any growth in outstanding's to come from. It’s much harder to get a Credit Card approved these days, as well as Personal Loans, with all the data available through CCR and the responsible lending requirements. Also keeping an eye out for write-offs.  

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Everything that Judo turns to gold. Except for maintaining deposit balances, it would seem. Tyro starting to see some growth in their deposits again, but their lending is non-existing.

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During the GFC, we saw a mass-exodus of customers from smaller financial services companies as they all sought the relative safety of the Big 4. That in turn made the smaller one's targets for the bigger one, like Aussie and Rams. That was a very different time than now, but people are an interesting bunch and I wonder what impact this will have on people desire to shift from their bank of 20 years to a bank that has only been open for a year.

More information on this, as well as a lot more can be found in the full report below.

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Marketing Teardown

We already had AfterPay’s teardown in the gun and ready to go, but we held off so we could properly look the impact of COVID-19 would have on their traffic. Would people just stop buying; would they prefer to spread them out over 4 weeks?  

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Honestly, it’s pretty hard to give any concrete support either way. Sure, it was a little higher than Feb and Jan, but Feb is a short month and everyone is coming off the post-Christmas buyer's regret.  

What was interesting was how AferPay’s traffic growth was in each market relative to its competitors.

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As expected, the dominant player in Australia:

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Haven’t really starter their push in earnest since buying ClearPay, but you can see why Klarna entering Australia has a few people nervous:

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Likewise for Affirm, but you can see why the markets are bullish about their expansion in to the US:

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The biggest indicator was that when we first looked AfterPay’s advertising back at the start of March, they had 90 ads running on Facebook and Instagram. At the start of April, they had none and only justrealised some eBay and Iconic co-brand ads on the 6th.

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