As of 5 Aug 2020

https://s3-us-west-2.amazonaws.com/secure.notion-static.com/e36792cf-d56b-4c81-9d8f-ca05e5feb861/Bull.png

Baseball Stats

Founded: 2008

Employees: ~500

Share Price: $68

MarketCap: $1.8B

3yr Return: ~4x in 2.5 yrs ('18 IPO)

Rev: $200M(+32%)

EBITDA: <$1M(1%)

Key Investors

65% Institutional

28% Early stage / VCs

6% 2- Cofounders

Key names:

Aimia - 13%, Polaris Partners, Canaan Partners, and TTV Capital (some might have sold post IPO)

Company description

  1. Co partners with card issuing banks (~2000 FIs) to get txn data for its customers to create a richer revenue generating loyalty program
  2. Co sells spending insights from that data to brands for running targeted marketing programs (4-6x ROI for advertisers, as outcome can be measured precisely)
  3. Thereby enabling savings for customers on things they already buy (13% inc in spend for customers post first offer is shown)
  4. Co accessed ~$3T of card spend till date (~50% US card swipes), users inc from 60M to 130M in last 1.5 yrs
  5. Long term agreements (4-7yrs) with top US banks (despite stringent data sharing norms given sensitive data)
  6. Programmatic self-serve ad engine being rolled out in 2020 (opens up the market for agency ad spend + digital self serve spend)
  7. Why Cardlytics ads are better ?
    1. Measurability → You get to know exact spend amount (Via card txn post redeeming personalized offer)
    2. Targeting → You reach out to highest intent customers - past purchase is highest predictor of future
    3. No time sensitivity → TV ads/FB/Google Ads are time sensitive 'impressions' vs these stay in your card
    4. Cash-back offers are provided on online banking sites, mobile apps, and emails where engagement is higher
  8. Brand run higher incentives with co due to above features e.g. Airbnb ran 15% off vs 5-10% in market offers. For Starbucks, co is the single largest media spend channel
  9. Top 3 bank customers (BoFA, Chase, Wells Fargo) contribute 3/4th revenue
  10. On brands end, customer inc - 20/ top 25 U.S. restaurant chains, 23/50 top 50 retailers, 3 / 4 top telcos , and 3/ 5 cable operators

Market / Competition

Co competes in the broader advertising spend space ($300B), o/w ~60% is digital (FB, Google, etc) → Card linked offers (CLO) are in low single digit penetration currently

Competitors

Two types - FI channel (similar to cardlytics, acq customers via banks), D2C (direct cash back offerings to consumers).

Some co's require offers to be activated before card swipe (e.g. Cardlytics) and some are automated sold more as loyalty building vs specific campaign.

**FI Channel (**Biggest difference for Co is frictionless automated user enrollment via FIs vs these companies have to acquire users organically)

  1. Cardlytics
  2. Augeo (bought D2C brand - Empyr recently)
    1. Private Co with focus on employee incentives, health and wellness, and loyalty.
    2. CLO is small part of rev but growing rapidly
    3. Large partners - Fifth Third Bank, USAA
    4. Its offers don't require customers to click to activate
    5. Works with 3rd party merchant aggregators to get additional offers - e.g. Groupon
  3. Affinity Solutions
    1. Operates as loyalty platform for banks. Sells via CBS / Payment processors
  4. Kard
    1. NY based startup, Barclays as first FI client
    2. Partnership with merchant aggregators to get marketers
    3. Does not req customers to click offer to activate before using
  5. Meniga (EU)
    1. Broader scale FI with digital banking software, PFM and CLOs
    2. Equity funded by Islandsbanki (Iceland), Swedbank, UniCredit (Italy)
    3. Provides self-service portal to marketers for campaign creation/management

D2C

  1. Empyr ($50M funding)
  2. Dosh ($80M funding - Goodwater Capital, PayPal)
  3. Drop ($30M funding - NEA)