Private Markets, Angel and Secondary Investing, Sacra

Sacra

Private Markets, Angel and Secondary Investing

Bringing transparency to private markets so investors, founders, and employees can build on conviction. Sacra delivers deeply researched insights on the private companies shaping tomorrow's markets. By surfacing the data, context, and operator perspective that are missing from private markets today, we help secondary buyers and sellers price equity accurately and unlock liquidity for the people building these businesses.

Private Capital Markets

<ul><li>Betterment and Wealthfront survived the robo-advisor purge by building the biggest brands in the space.</li><li>Growth slowed to low double-digits for both Wealthfront and Betterment in 2021 and 2022 with the rise of meme investing via Robinhood.</li><li>As interest rates have climbed to 5.25-5.50%—the highest levels since 2001—Betterment and Wealthfront’s AUM growth has re-accelerated, growing 50% and 77% respectively.</li></ul>

Betterment and Wealthfront survived the robo-advisor purge by building the biggest brands in the space.Growth slowed to low double-digits for both Wealthfront and Betterment in 2021 and 2022 with the rise of meme investing via Robinhood.As interest rates have climbed to 5.25-5.50%—the highest levels since 2001—Betterment and Wealthfront’s AUM growth has re-accelerated, growing 50% and 77% respectively.

Wealthfront, Betterment, And The robo-advisor Resurrection

Chime Financial / Private Capital Markets

<ul><li>In April 2024, Chime hit $1.5B in annualized revenue with 7M customers (“most with direct deposit”) for ARPU of $214—Chime is now on track to hit $1.9B by the end of 2024, up 46% year-over-year after growing 30% to $1.3B in 2023.</li><li>Now, Chime is launching the fintech product—lending—that has been the biggest driver of increased profits for neobanks around the world, offering loans of up to $1,000 in alignment with their risk-off philosophy around products for low-income consumers.</li><li>Chime (2012) found product-market fit offering totally free checking accounts to the 58% of working adults (about 138 million people) making less than $65K per year just as big banks like Wells Fargo (NYSE: WFC) were introducing minimum balance requirements to recoup revenues post-Great Financial Crisis.</li></ul>

In April 2024, Chime hit $1.5B in annualized revenue with 7M customers (“most with direct deposit”) for ARPU of $214—Chime is now on track to hit $1.9B by the end of 2024, up 46% year-over-year after growing 30% to $1.3B in 2023.Now, Chime is launching the fintech product—lending—that has been the biggest driver of increased profits for neobanks around the world, offering loans of up to $1,000 in alignment with their risk-off philosophy around products for low-income consumers.Chime (2012) found product-market fit offering totally free checking accounts to the 58% of working adults (about 138 million people) making less than $65K per year just as big banks like Wells Fargo (NYSE: WFC) were introducing minimum balance requirements to recoup revenues post-Great Financial Crisis.

<ul><li>Mercury is becoming the Booking.com of startup banking, aggregating demand using free checking accounts and the best banking experience to commoditize suppliers (partner banks) who pay for access to Mercury’s customer base.</li><li>SVB got unbundled during COVID and then unwound completely in 48 hours, with Mercury and Brex initially emerging as the primary beneficiaries, with Mercury adding $2B+ in deposits and thousands of customers in a week.</li><li>SVB’s growth left it vulnerable to bottom-up disruption from Mercury and Brex (both founded in 2017), which offered bank accounts and corporate cards to underserved startups outside the core Silicon Valley clique (e.g., international startups).</li></ul>

Mercury is becoming the Booking.com of startup banking, aggregating demand using free checking accounts and the best banking experience to commoditize suppliers (partner banks) who pay for access to Mercury’s customer base.SVB got unbundled during COVID and then unwound completely in 48 hours, with Mercury and Brex initially emerging as the primary beneficiaries, with Mercury adding $2B+ in deposits and thousands of customers in a week.SVB’s growth left it vulnerable to bottom-up disruption from Mercury and Brex (both founded in 2017), which offered bank accounts and corporate cards to underserved startups outside the core Silicon Valley clique (e.g., international startups).

Mercury: The Unbundling Of Silicon Valley Bank

<ul><li>"2022 was obviously an interesting time for fintechs."</li><li>"Embedded finance is definitely ramping up."</li><li>"The last year has really confirmed our model and approach."</li></ul>

"2022 was obviously an interesting time for fintechs.""Embedded finance is definitely ramping up.""The last year has really confirmed our model and approach."

Peter Hazlehurst And Kris Hansen, co-founders Of Synctera, On BaaS In 2023

<ul><li>Chime (launched 2012) found initial product-market fit marketing to millennials and the 75% of Americans living paycheck-to-paycheck with no-fee accounts and 2 days early access to their wages.</li><li>Chime can grow ARPU from the ~$30-$120 of a top interchange-based neobank to the $1,200 of a full-service consumer retail bank like a Bank of America and increase LTV by turning on additional features like crypto, investing, insurance, and most importantly, lending.</li><li>Chime’s lead gives it the chance to build the CNBC of finance superapps, positioned against Cash App’s meme-y, Wall Street Bets-adjacent finance superapp.</li></ul>

Chime (launched 2012) found initial product-market fit marketing to millennials and the 75% of Americans living paycheck-to-paycheck with no-fee accounts and 2 days early access to their wages.Chime can grow ARPU from the ~$30-$120 of a top interchange-based neobank to the $1,200 of a full-service consumer retail bank like a Bank of America and increase LTV by turning on additional features like crypto, investing, insurance, and most importantly, lending.Chime’s lead gives it the chance to build the CNBC of finance superapps, positioned against Cash App’s meme-y, Wall Street Bets-adjacent finance superapp.

United States

Chime Financial, Inc. develops online banking software. The Company designs financial software to provides online banking, mobile payment, debit and credit cards, and savings and spending account opening services. Chime Financial serves customers in the State of California.

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Chime Financial (CHYM US)

Wealthfront, Betterment, And The robo-advisor Resurrection

TL;DR: Betterment and Wealthfront survived the robo-advisor purge by building the biggest brands in the space—before the cost of customer...

Sacra

Chime At $1.5B/year

TL;DR: Chime hit $1.5B in annualized revenue in April 2024 with the unsexy business model of neobanking for low-income consumers. Now they're...

Sacra

Mercury: The Unbundling Of Silicon Valley Bank

TL;DR: As Silicon Valley Bank collapsed last week, $3B+ in funds flowed through the startup ecosystem to other startups, particularly neobanks...

Sacra

Peter Hazlehurst And Kris Hansen, co-founders Of Synctera, On BaaS In 2023

Sacra interview with Peter Hazlehurst and Kris Hansen, co-founders of banking-as-a-service platform Synctera.

Sacra

Chime: The $1.3B/year could-be Superapp

Chime (dataset) built the #1 neobank in the United States by focusing on lower-income consumers looking for early access to paychecks. Now, they...

Sacra

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