I've been trying to understand the UK market more and have been reading everything I can on this. Turns out you have to be careful in looking at Klarna and any statements they make. Klarna is a bank, and the bulk of their business is not BNPL, but is a traditional payment gateway for ecommerce. The majority of people have no idea that Klarna is involved. It is like you buying from an Australian website who uses eway for their payments, and then eway describing you as an active user. Yes - technically you have used them, but it isn't an active user in the sense of BNPL.
Do you notice how Klarna never disclose their BNPL GMV? You will find it is most likely because it is tiny compared to others, and it suits them to refer to customers. They claim twice as many customers as Afterpay in US, but it is suggested that Afterpay have about 70% market share in the US.
Re the UK, everyone say BNPL has some of the lowest penetration in UK compared to other markets. If that is true (no reason to doubt it), then there is no way Klarna has 24m active users.
LBY have always credit checked customers, so growth hasn't slowed. And if you look at the data, it shows that LBY's growth has been increasing at a faster % over the last 12 months, and this has been in all markets.
Interesting, the loss is lower than expected. It looks like the credit performance is much better. Post audit, it looks like the September Qtr was quite a bit better performance. So the real NTM for Sep Qtr is higher than reported in the quarterly. This is probably one of the best NTM performances across all BNPL providers.
The growth for October and November is huge, and great to see.
How LBY has a valuation lower than OpenPay is beyond me and is an absolute joke. And the GMV multiple and Revenue multiple of LBY is also a joke.
The market is completely asleep. Once LBY get their act together on investor relations and people learn about it, I would expect their valuation to increase to become similar multiples to others (or at least I hope it does).
Cheers Marv
LBY Price at posting:
$1.38 Sentiment: Buy Disclosure: Held
