Cashrewards – the next category killer
In this second interview, Gary Rollo and Bernard Wilson Chief Executive Officer of Cashrewards discuss the unit economics and the growth strategy post the company’s IPO.
The Cashrewards business has a really clear formula – you invest to acquire customers for a relatively certain return which fuels growth for merchants as well as the Cashrewards business.
Growth in monthly active users has jumped from 15 per cent in FY20 to 31 per cent in July, 42 per cent in August and 64 per cent in September.
“The foundation of the unit economics of the business is the opportunity to scale the customer base and leverage that scale to drive the flywheel which will increase the numbers of transactions on the platform per customer.” Bernard Wilson
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View our previous insights on Cashrewards below:
CASHREWARDS’ THREE WAY WIN MODEL
WHY WE INVESTED IN THE CASHREWARDS IPO
The Montgomery Small Companies Fund owns shares in Cashrewards. This video was prepared 09 February with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to Cashrewards you should seek financial advice.
Gary is the Portfolio Manager of the Montgomery Small Companies Fund. Gary joined Montgomery in August 2019 after spending three years at MHOR Asset Management in Sydney as a Founder and Portfolio Manager. Prior to this, Gary was a Portfolio Manager at Renaissance Asset Manager in Sydney for six years. Before moving to Australia, Gary spent five years in London running Morgan Stanley’s Technology Sector Equity Research Team, as well as two years covering technology companies for JP Morgan.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
ken fraser
:
Thanks Gary but when will they start making a profit so they can be valued in some way and what percentage do they take per transaction value? Ken.
Gary Rollo
:
Ken
Thanks for your comment. CRW are one of our early stage type investments, we think profitability is 2 to 3 years out. But much will depend on the success or otherwise of growing the scale of their subscriber base and how they manage to lift, or otherwise, the spend per subscriber within that base. We think they have enough resources and management capability to demonstrate an outcome against those criteria. G