Consensus community valuation
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...
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:
- They highlighted how the operational 'jaws' are opening with revenue growing at a much faster rate than operating expenses
- Were operating cashflow positive in the month of June. Anthony Nantes almost seemed surprised at the rate of growth and said words to the effect of they can't spend for growth fast enough to keep up.
- Claim they would be profitable in FY21 now but for spend on growth. My take is that's a little misleading and excludes a whole lot of costs they would be up for anyway (even if some are non-cash), but at this early stage I'm not expecting them to be profitable.
- One of the growth spends is on their Financial Wellness Platform, which had 450k profiles as at 30 June (up 80% vs FY20). They emphasised this is reducing their CAC significantly and is generating alot of data that is used in lending decision making.
- Secured vehicle financing was launched in FY21 and already makes up 20% of the loan book.
- Executed on a 12.5% investment in a Spanish based wellness platform provider in August 21. This relatively modest investment gives them significant optionality in a much larger market and can be scaled up to 45% over the next few years depending on performance hurdles.
Nothing really stood out to me from the annual report as being particularly nefarious. The only slight cautions I have are:
- They announced they'd agreed terms on that EU investment back in March and stated it would cost AUD$400k. Today they're saying they executed it for EUR$715k (AUD$1.15m). It's a big difference and I can't see that they've explained that.
- They didn't take the opportunity to update on the past two months. It's easy to read too much into that but alot of companies at their stage development would do so...if they had good news...
[Held here and in RL]
