This thread is for new investors to understand the fundamentals of FFG, as well as to generate discussion.
FFG is very confusing company to understand, as it does not provide fulsome information in terms of ownership structures, BNPL launch details, financing, clients etc.
To recap:
- it has a Market Cap of $250mil.
- last quarter, it did $43,000 in revenue
- it had $1mil cash in the bank per last quarterly;
- it has $8million in convertible notes that may be drawn down.
With $43k revenue a MC would generally be between $2-5mil at best.
The $250MC must be due to its rollout of BNPL in Singapore although there is very limited details on what this entails, in terms of the financing and merchant side of things.
its services is aimed at corporates, and its financing is done by "third party investors" via the launch of debt instruments that will be presented to unnamed investors. No details are otherwise provided how FFG will be able to fund its operations, and whether it will be able to do so.
Given these third party investors take the risk on funding via debt instruments, how will FFG make money via its direct stake of 20%? The third party investors are taking all the risk, and therefore likely will need to make the majority of the money - how much money does FFG stand to make out of this relationship, and given it only has a 20% direct stake?
Smartfunding is owned 78.7% by FFG, although only 19.9% is held by FFG and the remaining 58.8% is owned by Abelco - however, FFG does not own Abelco, but only owns a majority stake in Abelco. Query therefore how FFG can own 78.7% of Smartfunding, if the 58.8% is owned by Abelco, which FFG only owns a majority stake in - very confusing, and I am sure there is an answer there that is not immediately visible.
There are no clients, no banks, no payment gateways etc in relation to the rollout. Most BNPL providers have announced pre-launch its merchants, its banks, its credit facilities, its payment gateways etc. I have not seen anything on FFG.
Conclusion
Perhaps others can help answer
- how does FFG own 78.7% of Smartfunding noting the above?
- how is FFG financing BNPL - it has $1mil in the bank, and has not disclosed financiers or details. How does the debt instruments work, who are these investors, how does FFG make money out of this relationship, if any, given the financiers are taking on huge amount of risk.
- who are the clients, banks, payment gateways - if any? Are there going to be any announced ever?
- how will FFG make money out of the arrangement, given its 20% direct stake and no risk?
IOU recently did a CR of $40mil to fund its BNPL, and it would be crazy for FFG to not halt soon and do the same, given the uncertainty around financing and customers.
Interested in others thoughts
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