An assortment of snippets today.
First up in the Fintech world I’ve long been a fan of Curve – I liked the product so much I even decided to buy a few shares in a recent Crowdcube raise. I think Curve has a very distinctive USP. For those of us with a multiplicity of personal and business debt and credit cards, having one card we can toggle charges to is hugely compelling. Its Go Back in Time facility which allows you to switch over which card to use AFTER a purchase is also compelling. Crucially, unlike many good ideas which never seem to go anywhere, after a series of funding rounds, this fintech now has the resources to properly scale into the all important US market.
Anyway enough waxing lyrically, what I did find interesting reading the latest investor update was the following mention : – “We’re testing Curve Credit , arguably our most game-changing feature yet, which will allow customers to split any payment into instalments. Klarna, watch out.”
Anyone following the Fintech space closely will know that the one product innovation which has had the biggest cut through is instalment payment services i.e Klarna, Afterpay and such like. Younger customers seem to find it really interesting and as its integrated with retailers, usage rates are shooting up. As you’d expect all the usual mavens of doom are now congregating, warning of borrowers not being able to pay back. But in truth those of us with grey hairs will simply recognise a new take on the age-old interest free model which doesn’t seem to have caused financial Armageddon. In my view much better that borrowers use these facilities rather than pay outrageous credit card interest rates.
But the one integration you really want hasn’t emerged yet – or not at least in anything I use. A debit card that allows you to space big bills over three simple payments (although I think PayPal might be trialling something in this space from memory as is Amazon with some products). If this is what Curve are planning then I think that could be a genuine game changer. Imagine a very expensive TV or bike (sorry I betray my age and gender here!), spaced out over three interest free payments?
Staying on the Fintech vibe I found myself perusing a quarterly research report from Drivewealth yesterday. You’ve probably not heard about this service before but in simple terms this is the platform that powers most of the US free share dealing offers offered by everyone from Revolut to Stake. Crucially if anyone has the data on retail investor flows in the US, its probably Drivewealth. Its also interesting to see what non US investors are buying stateside.
The big question is whether the supposed retail investor boom is a myth or a reality. The answer seems to be reality. According to DriveWealth retail investors have been more active this year – trading on average 10+ times YTD. In 2019, investors traded on average 2.23 times/month while the average US brokerage account trades 2-3 times per year (Source: FDIC report). For Drivewealth YTD the average trade size was ~$145, however this ﬂuctuates widely on a daily basis in the range of ~$95-275. Crucially the big chart below shows just how much trading activity in US shares by retail has shot up in the last few months. What I find interesting is the big jump in fractional shares i.e the ability to be able to buy say a part of an expensive multi hundred dollar stock.
The second table below shows which shares these private investors have been trading. In particular I was fascinated by the Top 20 trades for non-US investors. Alongside the usual FAANGs suspects we have (surprise, surprise) Tesla, Zoom and Virgin Galactic (!?). And Boeing, Coca Cola and Delta Airlines!!??????
Last but by no means least worth noting that SEEIT, the energy efficiency fund which I highlighted the week before last has decided to increase “ the size of the Initial Issue [ of its placing] from gross proceeds of £60 million to £110 million … the Initial Issue will result in the issue of 105,769,231 New Ordinary Shares at the Issue Price of 104 pence per share.”
This is I think very interesting. Many investment trust types have worried that capital fund raising might prove difficult in these turbulent markets, but SEEIT shows that for the right fund, raising new money shouldn’t be a challenge. Expect to see a last summer dash for fund raising as every other fund in this broad infra income fund space takes note.