$1 Club, page-27174

I haven't made anything up. I ran a scenario in which the company used the money to expand. The cash would have been used within 2 to 3 quarters. Once you add in additional staffing costs for other regions it may have been even faster than that. The requirement to raise capital would still be apparent. Costs would be far greater than they are currently. Look at the share price for all BNPL companies, they are all down, IOU would be in the same position if not worse given those additional costs. The requirement for raising capital would be even more dire.

You also haven't considered that the app is still a first version. It's was released in June and planning for a second version with major bug fixes has been penned for February. The company expanding so early on with the first version of the app would have been a huge mistake. As much as you want to trash the company for having bugs in the first version of the app, this is quite normal and they have a plan to address the bugs.

Saying that the company is now locked in to Malaysia means you're viewing the $50m that they raised as the one chance they will ever have. This in my opinion is incorrect. If you consider Hoolah, they started in Singapore and took just over 12 months before expanding overseas. Hoolah spent that time getting the app and the processes right before they expanded. They also had just over 1000 merchants. The company went on to raise an 8 figure funding round before being acquired by ShopBack. There's plenty of merit to what IOU are doing and the growth in a single region has been quite substantial while costs have only increased marginally.

A blanket statement like, "They should have used the $50m to expand" doesn't take any of the above into account. It's empty and lacks any real analysis. You haven't considered the initial cost or ongoing costs and the need for further equity raises within a shorter period of time. Because of the capital intensive nature of expansion the returns will be negative. You mentioned present value earlier today. If you ran an NPV calculation of expansion versus investing in IDSB, you would see that cost of expansion has a negative NPV because it continues to cost well after the initial spend.