Investor Update – Marketing, Open Banking and Board

Dear Investors,

I have some important and exciting news items to share.

Consistent strong portfolio performance with highly optimised risk management.
We are proud to share our strong portfolio performance of 6-8% for the three portfolios since the launch in June of this year. This performance of the portfolios comes with highly optimised risk management.

Marketing Push stage 2 and 3.
After some amazing work by Paul and Ilya, of automating end of day processing for our portfolio management data, we are now ready for Marketing push for stages 2 and 3.

We are very excited to have our new Marketing man Jamie Tringham lead these 2 stages. We will start with Stage 2 WOM referrals for our existing clients from tomorrow. SO keep an eye on your inboxes. All of our existing and new customers will be able to earn extra 1% for any referrals they make. Both you and your friend will receive extra 1% for any initial investment your friend makes.

We would like to thank you, our investors and customers for helping us build an amazing product. As we move on to the next stage of growth, we look forward to your support with the referrals to make it hugely successful.

Strengthening of the Board:
We are delighted to announce that Brendan Holt of Holdun Family will be joining our board. Brendan runs one of the most prominent multifamily offices out of Bahamas. On top of that Brendan is also the CEO of Holt Accelerator which has taken a stake in MarketsFlow. You will be hearing more about the Board in the next few days.

MarketsFlow OpenBanking API, micro-savings and Savings account:
MarketsFlow is currently working on Openbanking enrollment to provide micro-savings and new savings accounts which will pay higher rates of savings then the current savings rates on offer in the market.

This will enhance MarketsFlow offering to our existing and new customer segments – increasing AUM inflows using direct debits.

We’re also working on lots of other initatives so watch this space as we embark on the next stage of growth.

Tom
CEO, MarketsFlow

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Will the new savings be via peer to peer lending, mini bonds or corporate bonds?

I see these products naturally progressing to looking to acquire banking licenses. Glad to see an expansion of product range to make best use of MF technology.

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Really exciting times. MF’s portfolio performances are proving to be consistently excellent & it is a ringing endorsement of MF to have someone of Brendan’s stature join the Board.

I agree with Vishal everything seems to be inexorably heading towards banking status, and providing a suite of complimentary banking and investment products with considerable rapidity.

I really like the “stepping-stone” provision of products. Chip, Moneybox and others have proved how to make micro-savings work & like Martijn I think this is a stunning product. Then moving through the provision of savings accounts & into the higher risk, greater return areas of the MarketsFlow GIA/ISA portfolios & then on soon to the Futures portfolio.

There is a great feel and sense of cohesion to providing this suite of products and the Fintech micro-saving start-ups will not be readily geared up to move in to the scientific portfolio management areas for some time.

Also paying the highest savings rate of return will be another first, which will further reinforce the persona of MF in setting trends rather than following them.

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I would argue the complete opposite - we should do everything in our power To not be required to obtain a banking license, even if that means not pursuing certain products.

Banking licenses come with a whole host of regulatory burden and once you hit a certain size capital reserve requirements kick in which will stymie growth as you can’t leverage your capital as effectively. Asset managers have had one unique advantage historically - the ability to rake up profit margins well north of 30%, whilst deploying zero shareholder funds.

It is why their balance sheets are so effective and they traded typically at valuations of 14 to 18 multiples - a meaningful premium relative to broader financial services and even the market as a whole.

Furthermore, different geographies have wildly different regulatory regimes for banking licenses. This adds an unnecessary burden and slows down international expansion. There is a reason Revolut didn’t get a banking license until December 2018, at a relative late stage in their development and after they already had a good international presence. Meaningful, Monzo who has a UK banking license is limited to the U.K. and whilst it consider USA expansion, it will be a difficult one to pull off for them.

Unless your USP is being a challenger bank, every single FinTech I know has zero desire to get a banking license.

Let MarketsFlow do what it does best - be an accumulator through micro savings and other routes, and then be an asset manager with a pool of products that cover most people’s risk appetites, and then let people flex up and down between those products as their life changes.

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To add to this, it has been some time since the last funding round and I’m wondering whether MarketsFlow should do a significant round in the first half of this year to ensure it remains well capitalised?

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Thanks @VishalWilde we are currently working on this.

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