Before going into the details, I’d like to say that Remitly ($RELY) remitly.com is the one IPO (September 22) that I’m most excited about even though we’re expecting a handful of decent companies to go public soon. And this is mostly for 3 reasons:
1: The story and how the CEO/Co-Founder thinks about immigrants and how he wishes to better serve them (I was an immigrant once and used to work and send money back home)
2: The huge potential of penetrating the TAM (estimated at 960 billion by 2026) and increasing the SAM (Serviceable Addressable Market)
3: High almost-triple-digit Revenue Growth (92.2% for the last quarter)
What does RELY do?
According to their S-1 https://www.sec.gov/Archives/edgar/data/1782170/000162828021… Our vision is to transform the lives of immigrants and their families by providing the most trusted financial service products on the planet.
That is a clear vision and a very inspiring one (if you ask me). In simple words, Remitly allows immigrants to send money (remittance) to their families in over 135 countries around the world.
The Trustpilot reviews are pretty decent with a 4.3/5 score and 83% rated Remitly excellent trustpilot.com/review/remitly.com
I’m even surprised to see that they have 11 local providers where I live (Cyprus). 85% of their clients use the service through the Remitly App(as of June 30, 2021, the app had a 4.9 iOS App Store rating with more than 450,000 reviewers and a 4.8 Android Google Play rating with more than 170,000 reviewers).
In 2020, Remitly also launched Passbook https://www.passbook.app in partnership with Sunrise Bank N.A., a digital banking service available through a mobile app and uniquely designed for immigrants.
Revenue in millions
2019 126 2020 256 FH21 202
Revenue growth (very high growth)
2019 2020 103% FH21 92.2%
Gross profit margin (decent for the industry)
2019 55.87% 2020 57.03% FH21 56.65%
Operating profit margin (improving significantly)
2019 (40%) 2020 (11.4%) FH21 (5.2%)
Remitly currently offers
- 75 currencies
- 1700+ corridors (as defined on the S-1: corridor is the pairing of a send country, from which a customer can send a remittance, with a specific receive country to which such remittance can be sent)
- $16 billion send volume
- 6x+ avg 5-year LTV/CAC (how many times the customer is worth relative to the amount spent to acquire)
Remitly is set to go public this Wednesday, September 22 with an estimated market cap of about 6.5 billion. This would give it an EV/Sales of around 17. Compared to PayPal (PYPL) that has an EV/Sales of 13 and currently growing at 25%, then RELY seems fairly valued. From what I’ve seen and read so far I like the potential and might buy some on day 1 and add RELY to my 5-6 stock portfolio.