Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Varo bank published 4Q22 results that revealed lower quarterly cash burn through cost control, but revenue per client declined and the very high customer acquisition cost</li>
<li>SoFi’s cost reduction success in 4Q22 seems, in contrast to Varo, to have limited revenue loss, thereby bringing SoFi closer to breakeven; it trades at a premium to peers</li>
<li>These early 4Q22 results signals may provide some read across which we believe could be negative for Dave in particular, as well being a reality check for Inter’s US ambitions</li>
</ul>


Varo bank published 4Q22 results that revealed lower quarterly cash burn through cost control, but revenue per client declined and the very high customer acquisition cost
SoFi’s cost reduction success in 4Q22 seems, in contrast to Varo, to have limited revenue loss, thereby bringing SoFi closer to breakeven; it trades at a premium to peers
These early 4Q22 results signals may provide some read across which we believe could be negative for Dave in particular, as well being a reality check for Inter’s US ambitions


US Neobanks; Warning Signals from SoFi and Varo 4Q Results

<ul>
<li>Fintechs and neobanks suffered a valuations reality check in 2022, due to rising interest (and discount) rates, poor fundamental results coupled with - in certain cases - high cash burn</li>
<li>Most neobanks need to improve customer activity rates as well as product and revenue penetration; legacy banks are responding to disruptors and in developed markets megafintechs are encroaching on neobanks</li>
<li>We see 2023 neobank picks driven by bottom-up calls on focused execution; we turn constructive on Nubank, stay negative on Inter and Jago and neutral on Kakaobank and Banco PAN</li>
</ul>


Fintechs and neobanks suffered a valuations reality check in 2022, due to rising interest (and discount) rates, poor fundamental results coupled with - in certain cases - high cash burn
Most neobanks need to improve customer activity rates as well as product and revenue penetration; legacy banks are responding to disruptors and in developed markets megafintechs are encroaching on neobanks
We see 2023 neobank picks driven by bottom-up calls on focused execution; we turn constructive on Nubank, stay negative on Inter and Jago and neutral on Kakaobank and Banco PAN


EM and DM Neobanks in 2023; Selective Opportunity Driven by Bottom-Up Execution

Independent Research, SPACs, SPAC Track

SPAC Track

Independent Research, SPACs

Equity Capital Markets

Viveon Health Acquisition Co / Equity Capital Markets

<ul><li>Suneva Medical Inc is in advanced talks to go public through a merger with blank-check company Viveon Health Acquisition Corp. (VHAQ)</li><li>Capstar Special Purpose Acquisition Corp. (CPSR -28.51%) shareholders approved its merger with Gelesis</li><li>Dave (DAVE) releases redemption results from its merger with VPC Impact Acquisition Holdings III, Inc. (VPCC)</li></ul>

Suneva Medical Inc is in advanced talks to go public through a merger with blank-check company Viveon Health Acquisition Corp. (VHAQ)Capstar Special Purpose Acquisition Corp. (CPSR -28.51%) shareholders approved its merger with GelesisDave (DAVE) releases redemption results from its merger with VPC Impact Acquisition Holdings III, Inc. (VPCC)

SPAC Deep Dive, subSPAC

subSPAC

SPAC Deep Dive

Each week we’ll identify and break down for you SPACs that are capturing market share and making an impact.

<ul><li>In 2017, Los Angeles Based Fintech Platform Dave launched with a simple suite of financial management solutions and tools to save customers from overdraft fees</li><li>Four years later, and 11 million customers strong, the company went public through a SPAC merger with VPC Impact Acquisition Corp III</li><li>However, for Dave, the SPAC transaction could not have come at a worse time, as enthusiasm for SPACs and Fintech Companies are at a three-year low</li></ul>

In 2017, Los Angeles Based Fintech Platform Dave launched with a simple suite of financial management solutions and tools to save customers from overdraft feesFour years later, and 11 million customers strong, the company went public through a SPAC merger with VPC Impact Acquisition Corp IIIHowever, for Dave, the SPAC transaction could not have come at a worse time, as enthusiasm for SPACs and Fintech Companies are at a three-year low

How Does Dave Stack up in the Fintech Landscape?

<ul><li>VPC Impact Acquisition Holdings III, Inc. (VPCC) completed its merger with Dave</li><li>Benessere Capital Acquisition Corp. (BENE) adjourned its meeting to vote on its deadline extension</li><li>No deals today, No S-1s today</li></ul>

VPC Impact Acquisition Holdings III, Inc. (VPCC) completed its merger with DaveBenessere Capital Acquisition Corp. (BENE) adjourned its meeting to vote on its deadline extensionNo deals today, No S-1s today

United States

Dave Inc. operates as a digital banking services company. The Company develops banking application to build products that level the financial playing field. Dave serves customers worldwide.

Dave (DAVE US)

US Neobanks; Warning Signals from SoFi and Varo 4Q Results

Varo bank's 4Q results revealed lower quarterly cash burn through cost control, but revenue per client declined; SoFi seemed to have done a bit...

Victor Galliano

EM and DM Neobanks in 2023; Selective Opportunity Driven by Bottom-Up Execution

Neobank shareholder success stories are rare, but Nubank combines high customer activation and revenue conversion, with low cost to acquire; we...

Victor Galliano

The Nightcap from SPAC Track

Suneva Medical Inc is in advanced talks to go public through a merger with blank-check company Viveon Health Acquisition Corp. (VHAQ)

SPAC Track

How Does Dave Stack up in the Fintech Landscape?

In 2017, Los Angeles Based Fintech Platform Dave launched with a simple suite of financial management solutions and tools to save customers from...

subSPAC

The Nightcap from SPAC Track

VPC Impact Acquisition Holdings III, Inc. (VPCC) completed its merger with Dave. Benessere Capital Acquisition Corp. (BENE) adjourned its meeting...

SPAC Track