Macro Trends, page-9

I wanted to explore some of ISX's growth strategies that was mentioned in June with the curiosity to see if their banking license is feasible in different markets:

"Continuously expanding the existing share of the merchant GPTV and exploring APAC, LATAM US/CA markets to step in a new market this financial year." source: https://kalkinemedia.com/2019/06/21/isignthis-limiteds-patented-aml-kycc-systems-dream-run-continuous/

Let's focus on the LATAM (Latin American) market. Which includes Peru, Brazil, Mexico, Argentina etc etc (there's a lot).

Some themes:

- There are millions of people around the world who have a phone but no bank in emerging markets
- Facebook want to serve this unbanked market with their Libra cryptocurrency. FB's momentum has slowed with the loss of Mastercard, Visa, PayPal etc. Which is great, less potential competition as a payment service.
- The FinTech winners are the companies that have devised business models that can profit in less developed markets. Ant Financial Services Group’s Alipay and Tencent Holdings’ WeChat Pay in China, Paytm in India, and Safaricom’s M-Pesa in Kenya are some well-known examples.
- In Europe and Latin America, 2018 and the first half of 2019 have been good to the digital banks raising new capital.




Now let's shine the torch on Brazil. What are some FinTech themes occurring there that could create opportunities and a potential market fit for ISX's technology in terms of partnerships or creating their own product.

Key stat:

- 55 million people in Brazil don’t have access to a bank (no clue how big the number is in LATAM)

Not many here would have heard of NuBank, a Brazilian challenger bank that has raised almost $1 billion since its founding in 2013. Currently, NuBank has become the most valuable startup in Latin America. Nubank is trying to become one of the most valuable financial technology startups in the world, aiming for a valuation of between $8 billion and $10 billion as it prepares to expand beyond Brazil to all of Latin America. If they achieve this, Nubank will become the second-highest-valued FinTech startup in the world, trailing only the payments provider Stripe, which was most recently valued at north of $20 billion.

With 15 million customers, Nubank is the largest online bank outside of Asia. The company has found a receptive audience in a country with some of the most expensive borrowing rates in the world, and where people seeking banking services are normally expected to proceed through ultra-secure doors to find horrible customer service in Latin America’s largest economy.

I'm only theorising here, and I have no doubts entering LATAM will pose a lot of challenges for ISX as well as not having the team ready to expand into LATAM. However, there is a good case here to illustrate some of the growth strategies the ISX team could be exploring.


sources: https://www.bloombergquint.com/markets/from-mobile-banking-to-facebook-cryptocurrency-a-fintech-guide
https://www.vox.com/recode/2019/6/5/18654454/nubank-softbank-valuation-brazil-banking-funding
https://www.reuters.com/article/us-nubank-brazil-growth/brazilian-fintech-nubank-has-grown-to-15-million-users-ceo-idUSKBN1WQ26C