Asian fintech company MoneyHero commenced its U.S. operations on Friday with a union with the Thiel-sustained SPAC Bridgetown Holdings. MoneyHero Group's personal finance platforms offer advice on products such as credit cards, personal loans, mortgages, and insurance to its users.
On Friday, MoneyHero – an Asian fintech firm – opened its U.S. shares near $5.39 following the completion of its merger with special purpose acquisition company Bridgetown Holdings. However, the stocks quickly dropped to nearly $3.39 in the morning trade and Bridgetown's shares closed 4.06% lower at $6.15 on Thursday.SPACs are blank companies that offer IPOs in order to merge with private business and take it public, usually in a period of two years. MoneyHero CEO Prashant Aggarwal told CNBC prior to the listing, “There is a larger appetite for capital markets in the U.S. than in Asia and the U.S. investors are searching for access to Southeast Asia region.”The financial firm plans on using the proceeds of up to $100 million to "further accelerate growth and capture a fast-growing market opportunity" in the digital distribution of financial products in Southeast Asia. The deal with Bridgetown evaluated the firm at around $310 million.
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Formed in 2014 with headquarters in Singapore and Hong Kong, MoneyHero Group (formerly known as Hyphen Group and CompareAsia Group) provides online financial comparison platforms and product comparison tools which suggest services such as credit cards, personal loans, mortgages and insurance to readers. MoneyHero operates sites Singsaver and Seedly in Singapore, Moneymax in The Philippines, MoneyHero in Hong Kong, Money101 in Taiwan and CompareHero in Malaysia, with Singapore being the firm's biggest market. MoneyHero has yet to be profitable, with the two years ending December 31 2021 and December 2022 showing net losses of $31.0 million and $49.4 million respectively. The company's SEC filing outlines their plan of reorganization, operational and management efficiency, as well as reduced costs in an effort to become profitable. MoneyHero said in the filing that these measures had a positive effect in the second half of 2022 and that they expect this trend to continue into 2023. In November, MoneyHero Group, or Hyphen Group before the rebranding, had to lay off employees and saw the departure of its CEO. Aggarwal noted that the cost reduction measures taken in the third and fourth quarter of 2022 were in line with the tech industry and that they closed down an unprofitable market (Thailand), reallocated resources and improved marketing capabilities.
MoneyHero reports that it currently works with 270 financial institutions, including banks and insurance firms. During the first six months of 2023, the platform registered an average of 9.1 million unique users per month. According to Aggarwal, who has held executive positions at Visa and American Express, these users are looking for answers to simplify the complexities of financial products. The firm earns a fee each time a consumer signs up for a service with the financial institutions, although rates were not specified. The firm reported revenue of $68.1 million for the year 2022. Aggarwal noted that, despite this success, there is still plenty of untapped opportunity in Southeast Asian markets. He declared that the company intends to continue investing in growth initiatives in order to capture this potential.
At this volatile juncture, MoneyHero is listing despite many companies holding off on IPOs since 2022. According to a report from Kroll, financial and risk advisory firm, the number of SPAC IPOs has plummeted 76% in the first half of this year compared to the same period in 2023. Since listing via SPACs, VinFast and PropertyGuru have both seen their share prices decrease by over 50% since August 2020 and March 2022 respectively. When asked about why they chose this time to go public, Aggarwal simply stated “there is no good or bad time.”
"The question of 'why now?' is commonly asked, and my response is 'why not?' I don't know what the future holds for the market, but I'm confident that my organization is now ready to be a publicly listed company," commented Aggarwal. The recent IPOs of Instacart and Birkenstock have been disappointing, and Chip maker Arm has dropped 18% since its unveiling in September.
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