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July 2020: Moelis Australia: Wisr (WZR): Growing the book and improving credit quality
Moelis Investment Rating: HOLD and 12M Target Price: A$0.28.
Expecting to have a great quarterly as the car loans should be starting to kick in. Suggestions are in excess of $100M loan approvals for the quarter.
One metric that WZR have discussed previously is how long it takes to originate $50M in loans.
As growth accelerates this time frame has got shorter and shorter. Personally, I think they are within striking distance of announcing their first $50M month.
Wisr makes strategic investment in European fintech platform Arbor
Entry pathway to circa $1.76 Trillion EU consumer finance market*1
Highlights of deal:
Also WZR Arbor Investor Zoom Call
Sydney, 30 March 2021 - Wisr Limited (ASX: WZR) (ACN 004 661 205) (“Wisr”, or the “Company”) is pleased to announce that following the announcement of its investment into European financial wellness fintech platform, Arbor, investors are invited to join a Zoom webcast from 10.00am (AEDT) to 10.30am on Wednesday 31 March.
The Zoom webcast call will be hosted by Wisr CEO, Anthony Nantes and Dr. Lili Sussman, Chief Strategy Officer (CSO).
Please use the following link and passcode below to join the webinar:
For those wanting to join by phone, please use the any of the following with the Webinar ID: 994 6551 2396
iPhone one-tap:
Telephone:
WZR Trading Update:
After a long period of sidewise price action all the overhead supply should be nearly exhausted and I think this deal, once finalised, will be the trigger to restart the uptrend in price.
Wisr makes strategic investment in European fintech platform Arbor
Entry pathway to circa $1.76 Trillion EU consumer finance market1
Sydney, 30 March 2021 - Wisr Limited (ASX: WZR) (ACN 004 661 205) (“Wisr”, or the “Company”) is pleased to announce today it has executed a term sheet to invest, via a convertible loan structure, in European financial wellness fintech platform, Arbor.
If converted, the investment will give Wisr a small minority shareholding in Arbor, with a pathway to potentially increase the shareholding to 45% over the next 36 months.
Any additional investment is at Wisr’s option, subject to future valuation thresholds and contingent on various milestones being achieved. The investment remains subject to finalisation of due diligence and legal documentation which is anticipated by the end of April 2021.
Highlights of deal:
? Strategic investment by Wisr opens up entry pathway to circa $1.76 Trillion (AUD) consumer finance market1 in EU
? Low-risk investment structure - modest upfront consideration with options to increase
shareholding to 45% at Wisr’s election as the model is proven out across the EU
? Arbor is an EU based fintech with a financial wellness platform, utilising a digital wallet to offer savings, investment and lending features to almost 100,000 customers, and is
growing its user base circa 20% month-on-month
? Arbor’s revenue streams include a customer subscription-based model for its platform, as well as lending revenue via a recently launched “ethical loan” product
? Wisr and Arbor will share IP across both organisations, with Wisr assisting in delivering an ethical lending experience to Arbor’s customers through Arbor’s proprietary financial
wellness platform
? Wisr’s upfront consideration is circa $400,000 cash, with any follow-on investment subject to milestones being achieved by Arbor, and can be settled through a combination of cash and shares at Wisr’s discretion
Founded in 2017 and backed by leading venture capital firms FinRebel Group (New York), Tifin Capital Partners (New York) and Apex Capital Partners (Sydney), Arbor has accumulated almost 100,000 customers in the EU market and is rapidly scaling with a 20% month-on-month growth rate and a robust retention track record. Similar to the Wisr Platform, Arbor has built a holistic personal finance platform with
a complimentary suite of products that help to improve customer’s financial wellness. Arbor’s current offerings include a digital wallet delivering savings, investment, debt repayment features and a recently launched “ethical loan” product.
16 quarters of positive growth and the last 12 quarters have averaged 26% per quarter.
At this rate Wisr can look forward the following milestones in the near future and all this does not included the additional growth from the planned strategic investment in Europe as recently announced and currently subject to due diligence.
June 2021 - First $100M quarter
Sept 2021 - First $50M month
Feb 2022 - First $1bn loan origination
Wisr Posts 19 Consecutive Quarters of Growth, 151% PCP Result comes on the back of $97.8m in new originations for Q3FY21
Highlights
DISC: I hold
Addition to ASX300 in the September 2021 rebalance, very much on the cards.
Strong Growth Recorded on Key Metrics
? Operating revenue up 280% to $27.2M (FY20: $7.2M)
? Total new loan originations up 169% to $365.8M (FY20: $135.9M)
? Total loan originations $611M as at 30 June 2021
? Delivered maiden positive operating cash flow result for the month of June 2021
? Over 450,000 customer profiles (FY20: 250,554) in the Wisr Financial Wellness Platform as at 30 June 2021, an 80% increase
***
A good result they had already guided to (that didn't stop the market reacting though). Wisr may be a little more front of mind now as their ads were everywhere during the Olympics. Wisr's decks are generally excellent and this was no exception - it tells a compelling story. Key takeaways from the investor call:
Nothing really stood out to me from the annual report as being particularly nefarious. The only slight cautions I have are:
[Held here and in RL]
I'd be curious what others think of the practice Wisr has outlined below? I'm not sure I've seen it for this particular reason. I'm not sure why vesting of options produces a tax liability unless you sold them but assuming it does I've got mixed feelings. On the one hand you don't want them to have to sell a portion to pay the tax liability but on the other it feels like double dipping - you get the options and then want a loan to pay the tax at below market rates.
Also Wisr is a finance company - I'm pretty sure this rate isn't being offered to their customers for an unsecured loan. I'm leaning towards not liking it all...