Thanks for the reply, Mondy. Regarding the question “why are...

Thanks for the reply, Mondy.

Regarding the question “why are they putting money aside to take over another company, rather than putting it back into their existing business?”

Quite simply, perhaps they don’t need to! - and/or they see it getting better return / results for overall company in IDSB?

I can think of at least 2 more specific reasons of maybe why they didn't put it back in to their existing business.

1. They don’t need the money. Perhaps BNPL is fully funded already (plenty of other companies seem to get funding without needing $50M in the bank, so why would they need it?), - so why not put it in to a business that will return an income AND potentially plenty of other benefits and opportunities.

2. They need more money than they have been able to get access to. Thus, my speculation in the post you replied to, - so the investment not only provides benefits and opportunities, but also an income that potentially can/could be used to help servicing funding, or at least providing a guarantee. While I suggested it in my previous post, I don't really think for a second that they would need the full $4M income to support BNPL funding, but possibly it could help, especially if the initial funding required is large.

You suggest the investment in IDSB may not be a good use of funds. Above I have proposed two reasons of which I would call very valid use of the funds, or at least two reasons that make a lot of sense to me.

Can I ask you what would you suggest spending it on that would be better a better use of funds?

They don’t need the funds to build the product, this is now built. It is far too much to spend on the continuing marketing, product development and admin etc and now the live BNPL product now should be more than covering this cost and ramping up in accordance with the product take up. They still have a little left over (more than enough I would think if you assume funding isn’t an issue) to fund the expansion and product kick off in the new territories, etc
I have been pleasantly surprised at how well they have managed their cash burn this year, so that gives me confidence they don’t need a lot to expand in to the new territories, and no doubt they do forward estimates, and make decisions accordingly.

Regarding the suggestion that they invested, as “there was pressure to put it to work”. Of course, you could be right, but I think this is a somewhat harsh call. If they had spent the $50M in the first 3 months after receiving it people would have been concerned that they rushed into an investment, and now don’t have anything to support BNPL.
The way I see it, is they kept it, used what was needed to get the BNPL product built and out in to the market, and initially funded. Then, just a few months later after getting the BNPL product ball rolling, they invested a large chunk of the remaining cash else where in what they think was a sensible place.

To me, the very fact that they invested in IDSB suggests what I am suggesting could be correct. That is, they either don’t need the money for BNPL as it is already or they know it can easily be funded, OR, they need a passive income to access greater funding for the mass onboarding approach.

I agree that it would be nice to have all this articulated and explained by the company. Some companies do communication very well, IOU doesn’t do it perhaps as well as they could or should, - but this doesn’t mean they aren’t smart and astute businessman. I do see them trying to make an increased effort to communicate more information and more often, so hopefully this continues to improve.
The very fact that these guys managed to get $50M from a CR for a future dream BNPL product shows at least they are shrewd and quick thinking if nothing else. In implementation they “seem” to be slow, but most things if done well and properly take time, this of course forgetting all the COVID lockdown challenges this year. Also, if indeed the mass onboarding is going ahead, I suspect that there would be a ridiculous amount of work lining things up for all partners to ensure this goes smoothly.

We have seen (by the purchase of the licence, etc) that they like to do things properly. Ipay88 and Razer seem to be taking a long time to be onboarded, but COVID has complicated things, and their updates have said these are not too far away.

I prefer much that it happens slow and steady and they get it right, rather than crash and burn and go belly up….

Ok. Will stop there… enough for now. Again, to be 100% clear, for my part it is complete speculation and all IMO etc - It is really just me attempting to fill in the blanks while still giving them some of the benefit of the doubt, until things become a little clearer.