Maximilian Friedrich @maxmhfriedrich Twitter profile

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Maximilian Friedrich

7 months

Introducing Autopilot @WSummerlinAI and I have spent the last several years together researching and investing in fintech and artificial intelligence across the public and private markets. We have witnessed extraordinary founders build category-defining companies - Block

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square's Cash App apparently is testing a lending product that enables users to borrow $20-200. So --- Borrowing 20 bucks from an app doesn't sound like a big deal? It does. Hint: The $27 billion payday lending market. Thread ⬇️⬇️

Square's Cash App tests money borrowing for up to $200

Cash App, the peer-to-peer payments service from Square, is giving select users a way to get short-term loans. The company said it's only testing the

techcrunch.com

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Maximilian Friedrich

@maxmhfriedrich

2 years

What Hindenburg tells you: Cash App was "the only" electronic P2P payment processor mentioned in a COVID fraud indictment What Hindenburg doesn't tell you (cut out of screenshot): The defrauded funds came via Bank of America which sent the criminal $1,256,108 in PUA benefits

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square's transaction margin is rising as closed-loop transactions take more share of GPV. While this makes up a small part of Square today and Square/fintech co's make up small part of payments today, it offers a glimpse of the value of controlling both ends of the transaction.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Last week, Ant Group (the company behind Alipay) filed for potentially the largest IPO ever. If that doesn't make you listen, consider that in 2019, Alipay's payment volume was $16 trillion -- that's 12% more than China's GDP. What's the deal with Alipay? A (long) thread ⬇️⬇️

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Maximilian Friedrich

@maxmhfriedrich

4 years

Cash App is aggressively hiring engineers for "Cash Network" What are they building? From another job post, "the fastest, most reliable, and easiest to use" and "most-sought after payment network in the US" Likely: Facilitating trx between Cash App users and non-SQ merchants

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Maximilian Friedrich

@maxmhfriedrich

4 years

The power of network effects: Cash App disclosed customer acquisition costs of <$5, down from $20 in 2019 (Amrita Ahuja). With scale, CAC seem to go down, not up, contrary to many other fintech companies. No more efficient customer acq. method than network-driven P2P payments.

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Maximilian Friedrich

@maxmhfriedrich

4 years

In 2015, CBInsights put out a report describing how fintech startups are 'unbundling' banks product-by-product. Fast forward 5 years, and many of the fintech co's originally tackling one financial service are now 're-bundling' the full bank product suite.

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Maximilian Friedrich

@maxmhfriedrich

5 years

Cash App vs. Venmo Google Trends indicates that Cash App increasingly is taking share across the US Cash App has 'flipped' 111 Metros since 2016 (where Cash App has >50% share of search vs. Venmo) Cash App first took ground in Southern US states, now spreads across the country

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Maximilian Friedrich

@maxmhfriedrich

4 years

Yesterday, we put out our annual Big Ideas 2021 report. Fintech also is in there. For a closer look at the 4th section of the report - Digital Wallets - read below:

ARK Invest

@ARKInvest

4 years

The wait is over! #BigIdeas2021 - Download our annual report now!

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Maximilian Friedrich

@maxmhfriedrich

3 years

Pretty remarkable transparency from Acorns - "Given market conditions, we will be pivoting to a private capital raise at a higher pre-money valuation as we continue on our path to 10 million paid subscribers saving and investing for a better future."

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Maximilian Friedrich

@maxmhfriedrich

4 years

"Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020, up approximately 11x and 15x year over year, respectively." Read @yassineARK 's recent Bitcoin whitepaper:

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Maximilian Friedrich

@maxmhfriedrich

4 years

Stripe announced Treasury, an API service that lets Stripe customers offer banking services to their customers. Titans of industry in the past, banks are being reduced to capital API calls. How it started How it's going

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Maximilian Friedrich

@maxmhfriedrich

5 years

We think Cash App crossed 30 million MAUs in recent weeks and ended 2019 with 29 million MAUs, up from 15 million in 2018 and 7 million in 2017. Venmo, according to our model based on Venmo's API, crossed 25 million MAUs in late 2019. How did we arrive at those numbers? ⬇️⬇️⬇️

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Maximilian Friedrich

@maxmhfriedrich

4 years

Distribution in financial services is changing: Venmo and Cash App each have amassed roughly 60 million (annually active) users organically in the last 10 and 7 years, respectively. It took JP Morgan more than 30 years and 5 mergers/acquisitions to reach the same milestone.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Cash App likely will operate at a $1B revenue run rate as of Q2'20. Time it (likely) took Cash App, Square's 'side business', to go from $100M to $1B in annualized revenue: 2.5 years. Time it took Square's seller ecosystem to go from $100M to $1B in annualized revenue: 5 years.

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Maximilian Friedrich

@maxmhfriedrich

5 years

Just sent $1 to fintech friend @_matteotrentini in the UK using Cash App's new FX feature Cash App: Real fx rate, $0 fees TransferWise: Real fx rate, $1.10 fees Payment declined ❌ Cash App casually launched the cheapest fx service out there (expect monetization later)

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square just filed an 8-K saying that Capital lead @jackiereses will resign as October 30, 2020. Interestingly, she is listed as director of @chamath 's IPOC SPAC vehicle (great find by @GeorgeOfARK ). I'm sure there's more to come. Wishing her all the best.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Yesterday, we published a blog on our long-term view on Square including a valuation model that you can download on Github and test our and come up with your own assumptions. Check it out below ⬇️ Feedback always welcome.

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Maximilian Friedrich

@maxmhfriedrich

2 years

Or in other words, 88% of the money the criminal was able to obtain via BofA was cashed out through the traditional banking system (ATMs + bank branches + debit cards) - Not Cash App or fintech companies (Not clear what happened to the ~$500k delta to the $1.2m total)

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Maximilian Friedrich

@maxmhfriedrich

4 years

Launched in 2013 and truly monetized in 2017, Cash App now accounts for 50% of Square revenue (adj.) Using the introduction of Cash Card as starting point of monetization, it took Cash App 1/3 of the time to scale to current rev. level ($435m) that seller needed (3 years vs 9 y)

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Maximilian Friedrich

@maxmhfriedrich

4 years

Based on Square data, the COVID-19 crisis accelerated the rate of cashless payment adoption by 4x, pulling forward adoption curve by 1.5 years. Cash transactions at Square sellers fell ~5% in the 6 months from Feb. to Aug. 2020, would have taken ~2 years based on pre-COVID CAGR.

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Maximilian Friedrich

@maxmhfriedrich

4 years

The deal is official In addition to the benefits described below, the integration of tax services also should further legitimize Cash App as a serious financial platform from users’ perception, contributing to overall trust in and potential monetization of all offered services.

Maximilian Friedrich

@maxmhfriedrich

4 years

Square in talks to buy Credit Karma's tax-prep business. Would complement Cash App's (CA) offering, might be able to customize other products based off collected data. Earlier this year, CA encouraged users to use CA routing/acc. number for tax returns.

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Maximilian Friedrich

@maxmhfriedrich

4 years

It looks like Cash App hit 40 million MAUs. SensorTower (data source) was pretty close to Cash App's disclosed MAUs of 24M in December 2019. If their methodology didn't change recently, and the number is accurate, this would be huge. 1 in every ~7 US adults uses Cash App.

Sean D. Emory

@_SeanDavid

4 years

Cash App by Square ( $SQ) now has 40 million users who have used the app over the trailing month. About half the total of PayPal, but growing at 2x the rate, +96% y/y. 4x the y/y growth rate of Venmo, and already a larger user base.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square makes its first international acquisition for Cash App Acquires Spanish and pan-European peer-to-peer payments app Verse ( @joinverse ) for an estimated EUR30-50 million ($34-53m) Never heard of Verse? A thread ⬇️

George Whitridge

@GeorgeWhitridge

4 years

@mfriedrichARK @Square acquires Verse for @CashApp , a mobile wallet provider based in Spain! Verse has a European payment license, allowing it to operate throughout European economic area....

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Maximilian Friedrich

@maxmhfriedrich

2 years

.. and the vast majority of those funds obtained via BofA was cashed out using ATMs: $375,177 Bank branches: $39,180 BofA debit cards: $205,273 "Money Transfers/Funds Transfer services" *including* Cash App were responsible for $85,130, ~7% of total or ~12% of cashed-out funds

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Maximilian Friedrich

@maxmhfriedrich

2 years

Talk about a valuation reset (at least in the secondary market) Shares of private companies traded at a 50% discount to their last primary round on secondary marketplace Forge in Q4

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Maximilian Friedrich

@maxmhfriedrich

2 years

While Cash App likely was used for fraud during the COVID pandemic (a problem that every financial services company is battling- all the time, see below), ironically, in this example, Cash App's spending limits might have prevented the criminal to cash out even more of the funds.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Credit card applications nearly have been cut in half in 2020 while rejections have doubled vs. 12 months ago. A stumbling credit card business puts ~25% of Citi's and J.P. Morgan Chase's revenue at risk.

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Maximilian Friedrich

@maxmhfriedrich

4 years

We are looking for a Internet/ Fintech analyst to join our team at @ARKInvest 🗳

ARK Invest

@ARKInvest

4 years

Want to join the ARK team? We're hiring! We're looking for an Internet/Fintech analyst. Interested? Inquire within:

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Maximilian Friedrich

@maxmhfriedrich

3 years

Comp'ing crypto fees (bitcoin), Cash App cheapest for low, Coinbase mostly cheaper for higher $ amounts. Not 🍏-🍏 as value props/use cases differ: - Cash App: bitcoin only, buy/sell/hold/send/withdr. - Venmo: 4 currencies, buy/sell/hold - Coinbase: 53 curren., various functions

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Maximilian Friedrich

@maxmhfriedrich

5 years

Uber launches new brand “Uber Money” - Bank account for drivers, debit card, no-cost $100 overdrafts, credit card w/ 5% cash back on Uber services for riders; Partnership with BlackRock and others to help drivers save, eg depositing 20 cents per ride to savings/ investing account

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Maximilian Friedrich

@maxmhfriedrich

4 years

(1) Multiple announcements last week in intersection of payments/e-commerce Shop Pay -> Facebook PayPal focusing on digital wallet w/ 'commerce', BNPL Affirm targets "higher frequency purchases" Common theme: Value prop. moving from conversion to demand aggregation/generation

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Maximilian Friedrich

@maxmhfriedrich

4 years

Payments is a low margins business everywhere in the world, but especially in China. Peer to peer (P2P) payments are free, while merchants pay significantly less for Alipay (mostly QR code) payments than cards. The majority of mobile payments in China are P2P, meaning free.

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Maximilian Friedrich

@maxmhfriedrich

5 years

The Rise of Square's @CashApp Cash App 'conquered' the southern US states in 2017 and has since expanded its presence. Our research suggests that Cash App will be able to retain its 100%+ annual user growth rate, while annual Venmo signups dipped below 70% already in 2018.

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Maximilian Friedrich

@maxmhfriedrich

2 years

Why use this example? All financial services companies, including banks, encounter and combat fraud, especially during the COVID pandemic - Square and Cash App are no exception, although the short report makes it sounds like it.

Green Dot, PayPal helped Secret Service recover more than $400M in stolen COVID-19 relief funds

Criminals have swindled nearly $100 billion through fraudulent applications since the start of the pandemic in the U.S., the agency said this week.

www.bankingdive.com

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Maximilian Friedrich

@maxmhfriedrich

4 years

In fintech Europe, everyone's talking about challenger banks. VCs poured $2+ billion in N26, Monzo, Revolut, Starling alone. Big press headlines. Largely unnoticed, France's Lydia build a 4m user base by using P2P network effects instead of big VC money (roughly speaking).

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Maximilian Friedrich

@maxmhfriedrich

2 years

Fraud is an optimization problem. Companies have a risk engine that they're continuously perfecting and can tune up or down. Some fintech co's might have temporarily tuned them down to provide a lifeline to many struggling individuals and businesses ignored by banks during COVID.

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Maximilian Friedrich

@maxmhfriedrich

5 years

We spent the summer scraping Venmo's public API, enabling us to get an unprecedented real-time as well as historic read on Venmo's growth and user dynamics. Below a summery of our findings. We'll follow up with a more in-depth paper in the coming weeks.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Cash App is hiring for an "European Operations Manager", indicating a possible expansion to mainland Europe soon (Cash App already is available in the UK). Comes ~3 months after Square acquired Verse, a Spanish P2P payments startup. Archived link below:

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Maximilian Friedrich

@maxmhfriedrich

4 years

In a survey ranking the 100 most popular companies by customer satisfaction, banks took three of the bottom ten places. According to another survey, 71% of Millennials would prefer to visit their dentists than engage with their banks. Cash App takes a different route. Read ⬇️⬇️

ARK Invest

@ARKInvest

4 years

#CashApp is revolutionizing consumer finance with a brand that customers actually like. Analyst @mfriedrichARK has more:

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Maximilian Friedrich

@maxmhfriedrich

5 years

Google Search Trends indicates that Cash App truly is pulling away from Venmo for the first time. Follows a quarter of record Cash App downloads (3m+, h/t @_SeanDavid ). Venmo API indicates that Venmo experienced a record weak Q4 with 11% y/y sign ups growth, lowest ever.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Meanwhile, a Cash App loan that is rolled-over for 8 weeks compounds to $230 ($200+$200*5%+8*$200*1.25%) -that's the same amount traditional payday borrowers must pay back after only 2 weeks, without any roll-overs. Cash App is preventing borrowers to fall into deep debt traps.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square is starting to integrate @CashApp into its loyalty program As captured by @caseymeekMD (below), points and rewards will be accessible via Cash App Seems pretty straight forward But could have big implications for customer acquisition in both ecosystems Short thread ⬇️

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square posted strong Q2 earnings ~ Thread ~ How strong? Look at this post from May ⬇️ Anticipated that Cash App will exit Q2 w/ $1+ billion annualized revenue (ex. Bitcoin). As of Q2, *gross profit* stands at $1b+ annualized, revenue even at $1.3b.

Maximilian Friedrich

@maxmhfriedrich

4 years

Cash App likely will operate at a $1B revenue run rate as of Q2'20. Time it (likely) took Cash App, Square's 'side business', to go from $100M to $1B in annualized revenue: 2.5 years. Time it took Square's seller ecosystem to go from $100M to $1B in annualized revenue: 5 years.

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Maximilian Friedrich

@maxmhfriedrich

2 years

The report is made up of half truths and misleading data points or ones the investor community already knew. But would could be follow-on implications for Block and fintech as a whole? Regulators already are set on combating fraud on P2P payment apps:

Small Banks Warn They Might Have to Drop Zelle Over Scam Payment Costs

Credit unions and community banks say they might not be able to afford the cost of repaying customers targeted in payment scams.

www.wsj.com

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Maximilian Friedrich

@maxmhfriedrich

5 years

Cash App's marketing is on another level Step 1: Use influencers to insert habitual payments network into hyper engaged user network (+best age group to introduce financial services to) Step 2: Let payment network get sticky Step 3: Upsell financial products beyond P2P payment

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Maximilian Friedrich

@maxmhfriedrich

4 years

Already commonplace in China (see quoted thread below), Square is bringing the contactless end-to-end QR code experience to restaurants in the US. All from one's phone: 1. Scan QR code to menu 2. Select and order menu items 3. Pay for selected items

Square launches QR codes that let you order from your table at a restaurant

QR codes have been hugely popular with restaurants during the pandemic.

www.theverge.com

Maximilian Friedrich

@maxmhfriedrich

4 years

"Now many restaurants don’t even offer menus anymore. They have a QR board on the table–you’re supposed to open up your mobile pay apps, scan the code, which leads you to the restaurant’s home page. You order things using your phone and pay the bill after meal using the same app"

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Maximilian Friedrich

@maxmhfriedrich

5 years

Venmo now is the second largest digital consumer finance platform in the US with 40m active users Excluding JPM's credit card business Venmo probably is the largest Square's Cash App at #6 with 15m active users 1 in 3 US adults (age 18-64) now uses either Venmo or Cash App

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Maximilian Friedrich

@maxmhfriedrich

4 years

"Cash App is culture." @jack on Square's Q2 earnings call. True.

Cash App

@CashApp

4 years

Introducing our apparel collection, Cash by Cash App. Explore it at Get 25% off with your Cash Card.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Only 0.1% of the US adult population invested into startups in 2019 (were Angel Investors) as opposed to 128,000,000 US adults who directly or indirectly own stocks (~55% of US adults). Should more retail investors be able to invest in private companies? What should the SEC do?

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Maximilian Friedrich

@maxmhfriedrich

4 years

Similar to how Square Capital solved the market for four/low five digit small business loan market which was not served well by banks, Cash App can reduce inefficiencies in the payday/pawn/overdraft market, which amounts to a total addressable market of $40 billion in revenues.

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Maximilian Friedrich

@maxmhfriedrich

2 years

🚨 Hiring 🚨 We're looking for a Venture Capital Associate to help build the future of VC. Stay tuned! Required profile: 1-3 years in VC, entrepreneurial mindset Job description: Application:

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Maximilian Friedrich

@maxmhfriedrich

5 years

#PayPal just reported 52 million annual active Venmo users, right on our estimate published in ARK's Big Ideas 2020 in early January.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square in talks to buy Credit Karma's tax-prep business. Would complement Cash App's (CA) offering, might be able to customize other products based off collected data. Earlier this year, CA encouraged users to use CA routing/acc. number for tax returns.

WSJ News Exclusive | Credit Karma in Talks to Sell Tax-Preparation Business to Square

The personal-finance portal’s deal could head off potential antitrust objections to its pending $7.1 billion sale to TurboTax maker Intuit.

www.wsj.com

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Maximilian Friedrich

@maxmhfriedrich

4 years

PayPal launches QR codes to majority of its 300m active users and 25m merchants across 28 countries After July 31st merchants pay 1.90% + $0.1 per transaction fee Compared to accepting cards* that's 25% cheaper than Square 26% c. th. Shopify 26% c. th. PayPal 27% c. th. Stripe

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Maximilian Friedrich

@maxmhfriedrich

2 years

.. what their underserved user base would have to pay for alternative products (payday loans, high account fees etc.). Plus, fintech companies (Chime, Cash App etc.) are able to offer their services and drive financial inclusion because their ability to generate such revenues.

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Maximilian Friedrich

@maxmhfriedrich

4 years

It should not be a surprise that Cash App's first lending product targets the (by many called predatory) payday lending market. Recall @jack 's comments on last Square call: "We're looking for the most critical financial services that people haven't had access to in the past"

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Maximilian Friedrich

@maxmhfriedrich

5 years

Cash App Product History and Other Notable Events (work in progress) What am I missing?

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square, Tencent and others invest €93 million into @satispay , Italy's leading digital wallet. We had the pleasure to have Satispay founder and CEO @AlbertoDalmasso on ARK's podcast earlier this year, a must listen:

Jack Dorsey’s Square Invests $18 Million in Italy’s App Satispay

Square Inc., the payments company run by Jack Dorsey, is among new big investors in Italy’s mobile digital payment platform Satispay SpA, in a move aimed to expand its operations across European...

www.bloomberg.com

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Maximilian Friedrich

@maxmhfriedrich

6 years

Fintech is today where Social Media (SM) was in 2006. Venmo adoption rate matches that of SM in 2006. Since then, older generations followed the young. Payment applications should benefit from network effects as did SM. In few years, Fintech adoption should look like 2018 SM.

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Maximilian Friedrich

@maxmhfriedrich

2 years

The report might amplifying this regulatory focus which could lead to fintech companies having to impose more friction which could slow down their growth. Although that's somewhat unlikely -- regulators are focused on a banking crisis and a crack down on crypto right now.

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Maximilian Friedrich

@maxmhfriedrich

5 years

"The bank, Square Financial Services, is expected to launch in 2021. It will operate independently, as a direct subsidiary of Square, Inc. Its primary purpose will be to offer small business loans for Square Capital’s commercial lending business, and to offer deposit products."

jack

@jack

5 years

Square Receives Conditional FDIC Approval for Industrial Loan Charter Application for Deposit Insurance

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Maximilian Friedrich

@maxmhfriedrich

5 years

Thread: How will Libra (L) reach mass adoption? Many this week pointed out that L will scale on FB's 2.3b users. But: Large user base != automatic adoption. Instead, (payment) networks have to incentivize users to join. Unclear yet how L will incentive users to join. 1/9

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Maximilian Friedrich

@maxmhfriedrich

2 years

The launch of FedNow this summer might bring those and other topics back on the table. And regarding durbin-exempt debit interchange and instant transfer fees, fintech co's have a strong argument for regulators: The fees they charge for their products largely are cheaper than..

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Maximilian Friedrich

@maxmhfriedrich

1 year

It's bittersweet to announce that today is my last day at @ARKInvest after five amazing years of learning, investing and building. Thank you to the entire ARK team and especially @CathieDWood and @wintonARK for their trust and guidance. (1/2)

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Maximilian Friedrich

@maxmhfriedrich

5 years

Bloomberg: Cash App (CA) testing free stock trading feature, much like Robinhood Robinhood investors payed ~$1300 per user in latest round, while one CA user is currently valued at ~$124 (adjusting SQ mark. cap. for CA revenues) Talk about high multiples in the private market

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Maximilian Friedrich

@maxmhfriedrich

4 years

ARK Fintech analyst hiring still going. Apply below + referrals always welcome (DMs are open)

Brett Winton

@wintonARK

4 years

Seeking: intellectual agility, autonomy and aggression. And a hunger to learn (and learn and learn.) Think you have what it takes? Drop us a line!

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Maximilian Friedrich

@maxmhfriedrich

6 years

Cash App's Google Search Trends (≈ adoption) is a near perfect fit with FDIC's Unbanked Rates by State. Square's @CashApp is replacing bank accounts and bringing banking services to the unbanked. Great job, @jack .

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Maximilian Friedrich

@maxmhfriedrich

4 years

73% of P2P and gift payments in the US are done in cash, according to the Fed. There still is a huge market opportunity for Cash App, Venmo and others to digitize P2P payments and introduce users to a Digital Wallet that can offer them other superior financial service products.

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Maximilian Friedrich

@maxmhfriedrich

4 years

In 2017, there were 14,348 payday loan storefronts in the US That's more than the 14,027 McDonalds locations in the US in the same year. 12 million Americans take out $27 billion in payday loans each year and pay over $4 billion in fees.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Yes, Walmart's renewed fintech ambitions are exciting, but large user base != instant cross-sell. Facebook (200m+ US users) offered free P2P payments in 2010s. Cash App and Venmo still won. Samsung (50m US users) x SoFi launched debit card last year. No mention in in SoFi SPAC.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Meme game strong 🔥

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Maximilian Friedrich

@maxmhfriedrich

4 years

With its this new product, Cash App provides consumers with a cheaper and more humane alternative to expensive payday loans. Cash App does not have the high infrastructure costs and capital intensity as payday lenders and can leverage the digital Cash App platform..

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Maximilian Friedrich

@maxmhfriedrich

4 years

Many fell for the Venmo fallacy, expected the next money losing P2P app. But Cash App built differentiated, sustainable value proposition for an unmet need: Fin. services for un(der)banked. Accelerated by genius marketing. Now moving up market & 'sideways' w/ sticky core users.

James Ho

@jamesjho_

4 years

I recall 1-2 years ago when NY hedge funds would debate if @CashApp could ever be a real business and profitable. Cash App is on track to do ~$1.5B in net revenue this year. And will be EBITDA profitable 2020.

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Maximilian Friedrich

@maxmhfriedrich

3 years

raises new round of funding, valued at $14 billion, up ~3x from prior valuation valuation March 2021: $5.2b -> 169% -> March 2022: $14b Coinbase market cap April 2021: $65b (IPO) -> -37% -> April 2022: $41b

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Maximilian Friedrich

@maxmhfriedrich

2 years

Excited to share the digital wallet section of @ARKInvest 's Big Ideas 2023 with the world This year, we put a laser-focus on the 'holy grail' 🏆 of payments: Closed-loop transactions facilitated by digital wallets First, let's travel back in time ⌛

Big Ideas 2024 | ARK Invest

www.ark-invest.com

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Maximilian Friedrich

@maxmhfriedrich

4 years

"PayPal charges no transaction fee to checkout with crypto" Is PayPal talking from a consumer or also merchant perspective? Crypto.comPay only charges for settlement. Will be interesting to see crypto pricing appear in full on PayPal's merchant fee page.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Much like Square's motto on the merchant side is to "empower small businesses", Cash App's product road map has been focused on democratizing consumer financial services, such as enabling users to purchase bitcoin (ie financial self-sovereignty), invest via fractional shares etc.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Cash Network sales ppl to be hired to "influence senior decision makers at the largest retail businesses and fin. institutions in the world" I see Cash App pitch as: - Tap into 36m+ Cash App MAUs as potential customers - Target specific users via Boost + we solve for attribution

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Maximilian Friedrich

@maxmhfriedrich

5 years

Would be great if companies like @Square would enable more businesses to launch such campaigns, maybe subsidized.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Fees range from $15-30+ per $100 borrowed, resulting in an average payday loan APR of 391% in the US. Borrowers in Texas on average pay an astonishing 661% APR for payday loans. See the map below for a state-by-state comparison.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Potential significance Square charges ~300bps per trx of which ~200 is split betw. intermediaries, netting Square ~100bps At Cash for Business' curr. pricing of 2.75% and cutting out majority of intermediaries, a balance-funded trx could yield SQ 2x+ the open-loop net take rate

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Maximilian Friedrich

@maxmhfriedrich

4 years

Some more thoughts on Stripe Treasury ⬇️

ARK Invest

@ARKInvest

4 years

Stripe is reducing banks to API respondents. Analyst @mfriedrichARK has more:

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Maximilian Friedrich

@maxmhfriedrich

4 years

At Affirm's price to sales multiple Klarna would stand at $43 billion. Is Affirm overvalued or Klarna undervalued?

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Maximilian Friedrich

@maxmhfriedrich

5 years

While Cash App (CA) users are #stackingsats , CA is stacking Twitter followers at ~10 users per second What % of those are new users? Banks pay ~1000$ to acquire 1 customer On CA Fridays, CA adds (hundreds of) thousands for a fraction (~$20 per user)

Cash App

@CashApp

5 years

It’s #SuperCashAppFriday . We’re giving away $50K in cash and BTC. RT with your $Cashtag to enter. You could win $100, $500, or even 1 whole bitcoin. For luck, tag a bitcoin believer. Follow @CashApp to qualify. No purc nec. Void where proh. Rules:

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Maximilian Friedrich

@maxmhfriedrich

2 years

Kaspi reported yesterday - A fascinating business and one of the strongest digital wallets / fintech co's globally. Over 50% of adults in Kazakhstan are daily users across a variety of products from lending, payments and travel bookings - all while printing a ~50% net margin.

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Maximilian Friedrich

@maxmhfriedrich

5 years

. @CashApp is an interesting marketing story. Its weekly #CashAppFriday tweets have become massively popular. Hard to say what % of engagement are sign-ups, but compared to 2018 looks fair to say they might retain similar MAU growth. Twitter is Cash App's public layer. 1/9 More..

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Maximilian Friedrich

@maxmhfriedrich

5 years

This is a tough time for SMEs & consumers alike While @Square waives software subscription fees for merchants in March, @CashApp 's helping consumers with 10% discounts Current Boosts - 10% Walgreens - 10% Any Grocery Store - 10% Family Dollar (w/out minimum Cash Card swipes)

Cash App

@CashApp

5 years

Check your Cash App for new Boosts to save 10% at Walgreens, grocery stores, and more.

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Maximilian Friedrich

@maxmhfriedrich

4 years

In the past, we've documented the overlap of Cash App users with the large unbanked populations in the South of the US and that Cash App is "banking the unbanked". Similar dynamics are true for alternative credit. Southern states have some of the highest APRs for payday loans.

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Maximilian Friedrich

@maxmhfriedrich

4 years

While the world is shifting online, JP Morgan is doubling down on offline, net opening 37 branches in Q3, the highest number since 2011. We believe distribution in fin. services is shifting from branch to mobile, putting $260b in assets at risk, with JPM increasing exposure.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Let's compare Cash App and a typical payday (PD) loan. Pricing: PD: $15 per $100, for initial two weeks as well as extra $15 fee per additional 2 weeks extension. Cash App: 5% flat fee -> $5 per $100, plus non-compounding 1.25% interest per additional 1 week extension.

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Maximilian Friedrich

@maxmhfriedrich

4 years

Square Online Checkout vs. PayPal vs. Shopify Pay

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Maximilian Friedrich

@maxmhfriedrich

4 years

There likely is low geographic overlap between Cash App users and SQ POS merchants Therefore, loyalty via Cash App could drive 1 Cash App adoption in SQ merchant regions 2 SQ merchant adoption in Cash App regions See chart below (using Google Trends and US Census data as proxy)

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Maximilian Friedrich

@maxmhfriedrich

3 years

Choosing sides (kind of): Stripe + Klarna enter strategic partnership, "deeper collaboration" and Klarna shifting "more of its payments volume to Stripe". Can read it as Stripe strategically positioning against (non-Stripe-powered) BNPL/APM eating volume

Klarna partners with Stripe to help online businesses grow their revenue

Online payment processing for internet businesses. Stripe is a suite of payment APIs that powers commerce for businesses of all sizes.

stripe.com

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Maximilian Friedrich

@maxmhfriedrich

5 years

We think that Cash App has been able to create viral growth via its marketing strategy that targets specific pockets of consumers and keeps existing users engaged. This approach seems to be reflected in Google Trends data, which indicates that Cash App is pulling away from Venmo.

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Maximilian Friedrich

@maxmhfriedrich

5 years

Some data on Venmo and Zelle for Q3'19 TPV ($ billions): ~27 (Venmo) vs. 49 (Zelle) # Trx. (millions): ~364 vs. 196 Avg. Trx. Size ($): ~74 vs 250 Overall, different use cases: Zelle mostly used for large payments, Venmo everyday p2p payments app with high user engagement

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Maximilian Friedrich

@maxmhfriedrich

4 years

CashApp could not only penetrate the single-payment credit market but expand it by offering attractive short term cash advance to other parts of its 30 million MAUs who did not consider payday loans in the past. It could impact the single payment credit market, beyond PD loans.

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Maximilian Friedrich

@maxmhfriedrich

4 years

.. to acquire users cheaply (for ~$20 while trad. banks pay up to $1500 per customer) and cross-sell them. Cash App also should be able to leverage existing relationships with institutional investors built via Square Capital to sell off loans to mitigate balance sheet risk.

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Maximilian Friedrich

@maxmhfriedrich

4 years

In part because 7 in 10 borrowers use payday loans for recurring expenses such as rent and utilities, 80% of payday loans are rolled over or followed by another loan within 14 days, leaving borrowers in debt traps. Fore more, see this paper by the CFPB;

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Maximilian Friedrich

@maxmhfriedrich

5 years

Cash App's Boost evolution "We’re building a state-of-the-art rewards, payments, and advertising platform that will both 1) propel Cash App forward as the leading global digital bank, and 2) power commerce end-to-end for the largest brands in the world"

Block is looking for a Growth Programs Manager - Network Acquisition, Cash App in San Francisco,...

Cash App’s Growth Team drives customer acquisition, engagement, retention, and monetization for Cash App overall. We’re building a robust platform to influence customer behavior and accelerate Cas...

www.smartrecruiters.com

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