I'm I disappointed in the growth trajectory of Splitit over the past few years - yes. But I find solace that Motive are no fools and have likely found Splitit's value proposition to be advantageous over other fintechs. Whether that value proposition is fully achieved is to be seen.
Contrary to some beliefs on this thread, I don't believe that Splitit is Visa preferred BNPL option on their Visa instalment. Visa is simply wanting to compete against the BNPL platforms (Affirm, Zip, etc) by offering their rails to fintechs, of which Splitit is one of many.
Splitit need to win merchants, payment processors, payment gateways, etc by demonstrating their value proposition.
Investing is always a fine balance between risk and reward, my risk is 100,000 shares at $0.11, so limited, but perhaps I'm a fool soon to be parted of 11k, however, I believe the reward can be quite pleasing. For instance, the US market in large appliance alone is approximately ~30 billion US per annum, which is right in Splitit's wheelhouse of transaction ~$1,000.
Furthermore, Visa Total Transaction Volume per annum is ~12.5 Trillion US. If Splitit's value proposition can capture only 0.25% of that TTV, that equates to a TTV of 31.25 Billion US for Splitit, at ~ 2.85% margin for a total revenue of ~ 890 Millions with annual operating cost i.e. 25-35 millions per annum, so can be quite profitable.
My play is 5-7 years, is it achievable, time only will tell, but fintechs can scale quite rapidly if the value proposition is preferred by merchants, payment processors, etc and if Splitit can execute on their growth strategy with minimal capital cost.
SPT Price at posting:
7.5¢ Sentiment: Hold Disclosure: Held
