I’m aware this is a difficult question to answer but we’ve not had an update on the ‘share price’ for a couple of years and I’d like to gauge where we’re at now. I’ve seen the $4.5bn valuation, following the Abu Dhabi round, although we weren’t given a share price in this and therefore don’t know what effect share dilution had in this round, if any. It feels like huge amounts of progress have been made and revenues have been growing strongly.
I’ve messaged the investor relations lady on LinkedIn, although she hasn’t replied to me and this was a number of weeks ago
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Anarchist
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Yes I totally agree that she won’t be sending out the valuation nilly willy! I more phrased it as a question when we would be provided with an update to shareholders. I maxed out on each round of the Crowdfunding so it now constitutes a decent amount of money and I would like to start planning for it tax-wise. I’m sure she is able to verify with Crowdcude who is/isn’t a shareholder
I think that the fintechs (Monzo, Starling, Revolut…) were probably all a bit overvalued.
If I’m remembering rightly, their initial valuations were on the basis of expected future profits at a time when funding was plentiful. So I’m not expecting a significant increase on the last publicly announced share price tbh.
I think I’m right in saying that whatever the last round was was an extension of the one a year (?) before so at the same share price.
Out of interest, does anyone know how much an investment would be worth of you invested the max in each crowdfunding round?
@WillsT: what tax planning can you do? I’m assuming that you’ll get whatever price Monzo floats/is acquired at, then you’re liable for the capital gains at the prevailing rate? Or am I being “unimaginative”?
I don’t have any comparisons to hand, but my understanding from keeping my eyes open for the last couple of years is that the fintechs who had funding rounds in 2021 have mostly chosen not to raise since then (or have not been able to raise what they want at their desired valuation), however, of the ones who have raised and the ones whose major shareholders have been reevaluating their book values, they’ve mostly all slashed the valuations by about 60-80% across the board.
Where Monzo was worth $4.5bn in 2021, let’s start by smashing that down to $1.5bn in line with the market. But then, as you say, Monzo has come on leaps and bounds and imho they have significantly outperformed on the financial expectations, so how much more value have they added to that $1.5bn starting value? By the end of this financial year they’ll probably have turned over $700m and if they were to put the breaks on any unnecessary investment in growth or expansion they could easily turn a profit of a couple hundred million dollars (although I think the next results will show a little over break even due to investment in growth). I think a back of the envelope calculation for me would be that if a company is high growth and can make $200m a year if they desire then a pe multiple of at least 20 would get you a roughly $4bn valuation floor. I know that’s quite a crude way of getting a ballpark valiation, but hopefully it’s better than "I don’t know! ".
Wise is a company worth looking at in terms of similar growth trajectories. Being a more mature business their financials have always been about a year or so ahead of Monzo . I believe they are running an annualised revenue rate around £1bn versus Monzo’s which I believe is somewhere around £500-700m right now. Wise is publicly traded on the LSE and is worth $8.3bn today, so if this comparison is valid then Monzo should probably be valued some unknown distance between my $4bn back of an envelope price floor and Wise’s $8bn.
I reckon if they floated on the stock market Monzo would probably be worth about $5-6bn., so the share price would be somewhrre around £20 or so. I think the Wise comparison really puts a lid on the possibilities of monster valuations like $10-20bn right now, because Monzo is clearly a less valuable company at the moment in my opinion. Maybe if they can break out into the US market then we can talk about adding naughts to the valuation, but while they are a UK bank with the 7th largest number of customers, personally I wouldn’t value them with such a huge number.
With the IPO market not moving anywhere and no need to raise loads of money when you’re in profit, it would be great if Monzo paid some dividends instead, to reward their ‘long suffering’ shareholders, if long suffering can be a thing for people who have made loads of money on paper. Just a 1% dividend when they announce their maiden profit would really put their head above the parapet and both be a mic drop to those in the financial press demanding they list and would also cool down those investors who are getting itchy feet after holding for longer than they expected.
It’s somewhere around 4000 shares or £80k at my (completely made up but with some reasoning behind it) valuation.
The main tax planning is moving shares to other family members (spouse or child) to ensure if JP Morgan presses the Buy It Now button and slam £5bn on the table that Jeremy Hunt can’t take half of your profit!
CGT is only 20%; it’s not taxed the same way as income. Income being, of course, for the plebs. Also you get a £6k allowance, and are only taxed on the increase, though that would presumably be most of it in this case.
Yeah it was definitely a “down round”, at least in terms of the non-literal meaning of that term.
I dunno, you mostly made a ton of assumptions with comparisons to general fintech companies and not other banks specifically etc. I’d personally believe a full DCA, and anything over that would be down to the buyer’s impression of growth prospects.
Did that person buy other people’s shares or something?
