[atomicmat]

Recently talked to one of their shareholders. Sounds like they're not focused on monetization right now. They're #1 aim is to acquire consumers (millenials preferably), gain scale, and then figure it out. Note that by acquiring millenials they're not gaining share from traditional brokers, they're more likely to expand the pie and get new people to trade. Hopefully these people are quite sticky, and will trade bigger and bigger amounts, by which point they'll be able to offer premium monetization options.

It's a long term play. They're going to be loss-making for a while. Their VC backers can handle it. It's like Transferwise (similar backers) who launched three years ago and who are still loss-making even though they've already processed >$1 billion in transactions...

[kordless]

> #1 aim is to acquire consumers (millenials preferably), gain scale, and then figure it out

The definition of a bubble, if there ever was one.

[bduerst]

It's a super risky strategy but a bubble? It's VCs throwing their money into a gambling pit, which is par for that industry.

[ShinyCyril]

That's interesting that Transferwise are making a loss given that they are charging a commission. What is their monetisation strategy?

[atomicmat]

It's very simple. 50bps of every transaction that you make. They will need MANY transactions to justify a $1B valuation :)

They're investing heavily now (at a loss) in marketing and in international expansion (note the recent US launch). Have you seen their recent marketing campaign in the UK? If you refer 3 paying users, you get £100 ($155) cash. Their cost of acquisition is therefore £33/user if not more. Assuming a 0.5% margin, they are therefore implying that each paying user will make at least £7,000 ($10,000) in transfers with them. And that's just to break even...