Oct 17, 2024

Satispay, when the unicorn loses its shine Welcome to Outlook, the Repubblica newsletter that analyzes the economy, finance and international markets. What I know about financial markets and the economy I learned by working for one of the main stock exchanges on Piazza Affari , the companies that buy and sell securities on the stock exchange for large investors. I took it with me when I became a journalist for La Repubblica where, among other things, I covered investigations and major scandals such as that of Parmalat, helping to unmask its false financial statements. Every week we will talk about listed and unlisted companies, personalities, institutions, scandals and investigations linked to this world. If you want to write to me, my email is [email protected] . Happy reading Walter Galbiati, deputy director of Repubblica They are called Unicorns and it is those companies that are valued a billion even before being able to certify its value with a listing on the stock exchange. In Italy, the most famous case is Satispay the company that deals with payments through mobile phones. The record round. In September 2022, on the occasion of a fundraiser to finance its growth, Satispay raised capital for 320 million eurosa subscription monster which gave the entire company a unicorn valuation of over one billion. Time passes. Two years later, however, let’s see the budget numbersit seems difficult to argue that Satispay can still guarantee those ratings or that it can do so in the near future. A 10 year old start up. To tell the truth, the judgment expressed by investors in 2022 had already been quite generous, because Satispay even then could not claim to be a fledgling start-up with time ahead of it to grow because it had almost ten years of activity behind it and the its profitability was already significantly negative. The beginnings. Its foundation dates back to 2013When Alberto Dalmasso , Samuele Pinta And Dario Brignone they had the intuition to ride the wave of Fintech which seemed to be the new El Dorado of finance. Fintech between lights and shadows: aims for an alliance with banks to restart by Carlotta Scozzari October 14, 2024 Yet, in such a long period of time Satispay has never been able to demonstrate the sustainability of your businessalthough its directors have convinced many private individuals and investment funds to invest in their company. Lee Jared Fixel… To date, the main shareholders, in addition to the founders (Brignone with 8.39%, Dalmasso with 6.93% e Surface with 1.2%) are important names in international finance like the fund Addition of three initiatives (18.94%) which is headed by the venture capitalist Lee Jared Fixelfamous in the world of start-ups for being the number one of Tiger Global, the 16 billion dollar private equity firm, among the first to invest in Facebook, Spotify, Uber And Group. …and the other shareholders. In short, not just any one, nor are the other shareholders who over the years have rounded up securities of various types: the Luxembourg Lightrock Growth Fund with the 7.7%the Chinese technology giant Tencentfamous for Wechat, col 6.2% and the Cayman Fund Capital Partner Greyhound IIIformer financier of Revolut and N26, col 5.6%. Among Italians, the funds stand out Mediolanum with the 2.6% and others 260 small shareholders. The 2021 budget. After almost ten years and a fundraising of 110 million euros, at the end of 2021 Satispay could count on 2.2 million users consumers e 170 thousand merchants register on the platform, but its revenues consolidated by sales and performance they stopped alone 6.3 million euros from 4 the previous year compared to costs for approx 32 million who brought that exercise to a loss almost 26 million euros. Money is needed. Already at the end of 2020, liquidity had been reduced to 2 million euros so much so that during 2021 it was launched a capital increase of 50 million of euros which always attracts big names like the ones already mentioned Lightrock And Tencentstill in the capital, and others released as Telecom Italia Ventures and the company of Jack Dorsey, Square (then Block). More money is needed. With the funds raised, 2022 can be reached, but the members realize that the funds are not enough to reach the end of the year and a new round becomes necessary. In September, the big shot from 320 millionthe unicorn one, which with a capital increase of 140 million allows for settlement the loss of 2022 closed with a 60 million hole of euros and face it with peace of mind 2023 finished with another red for 46.3 million. The weak health of the business. At the end of last year the consumer users, as well as the recorded exercises to the platform, they were almost doubled compared to 2021, at 4.2 million and 300 thousand respectively, but also losses were more or less the same pacecompared to only 22 million in revenues from services and benefits. “Business continuity”. In many years, the trend has never reversed and the growth in customers has never been accompanied by an improvement in company accounts. So much so that in the budget report 2023 of the parent company the administrators felt compelled to introduce a chapter entitled “Evaluation of the assumption of business continuity”. That thanks to a positive net worth of 155 million euros and liquidity of almost 50 million for now it is not questionedbut that may not be the case in the future if 1) the accounts will continue to go badly And 2) was no longer possible the raising of fresh capital. Moreover, this second point is more than probable, because what had helped subscriptions in the past was theabundant liquidity present in the financial system due to low interest rates. Climate change. The latest round that gave Satispay unicorn status came inheld 2022When the deposit rate was still zero. From September 2022 onwards, the climate has changed with the European Central Bank which continued, after the first adjustment in July, to raise rates for two years in a row. And to date we have not yet returned to a market where liquidity is abundant. The recall of the auditors. This is not yet an alarm, but also EYthe auditors of Satispay, wanted to underline in his budget report 2023 that chapter of the explanatory notes on business continuity with a “reminder of information”in which it is underlined that survival is not in doubt for a period of no “less than the next twelve months”. In other words, let’s see the 2024 budget and then understand if the prospects are still unicorn-like. #Satispay #unicorn #loses #shine October 17, 2024