Tomorrow Mintos will announce more details about their crowdfunding campaign and one of the key metrics - valuation. If it is not completely insane, I think getting a small % of Mintos equity might provide higher return than investing in loans on Mintos platform. So let’s see, what are the estimates about valuation right now?
Let’s start with the crowd. There was 1 poll in Mintos Fellows Facebook group about this topic, and I created 1 poll in Telegram as well. Results below:
If we exclude stuff like “negative valuation“ and “who cares“, then based on 40 Facebook responses:
47.5% voted for 50-100m €
25% voted for 251-500m €
10% voted for 101-250m €
10% voted for <50m €
7.5% voted for 500+ m €
And if we simplify things a bit, then majority think that valuation will be below 100 million EUR (57.5% from FB and 73% from Telegram). But I am quite sure that the number will be much higher.
How to estimate Mintos value?
I made some simple calculations based on comparison with EstateGuru Seedrs campaign - on left side you can see EstateGuru numbers, on right side - Mintos current numbers. Note that I don’t have the “last 12 months revenue“ for Mintos, so I used Mintos 2019 revenue.
EstateGuru valuation was 28.8m € and the 4 metrics I compared are from 3x to 8.7x higher in Mintos case, which would indicate a potential valuation range from 86.4m € to 250m €.
I predict that Mintos won’t focus too much on their revenue in the pitch deck - right now the goal for them is to grow as fast as possible, not run a sustainable and profitable business, so revenue is not that important, but showing that revenue is growing and losses are small - of course, is something to be proud of.
I also don’t think they will base valuation on “interest earned“ - it looks good at first, but it also attracts attention to fact that while Mintos helped their investors to earn 121m € in interest, it also helped them lose 50-60m € from problematic loan originators (assuming that average recovery rate will be 40-50%).
To get the highest valuation, focus should be on amount of investors signed up. Based on EstateGuru valuation, the value of 1 investor was 626 €, if we multiply this number with 343 254 Mintos investors, we get to a valution of 215m €:
Of course, there are some negative points to consider:
Mintos investor sentiment/experience is more negative than in case of EstateGuru. There is a reason why Mintos considers to remove comments from their blog.
For average investor in Mintos the return is probably about 2x lower than in EstateGuru
Huge conflicts of interest in Mintos, where the same people control Mintos + half of loan originators on Mintos
Some doubts about sustainability of business model - low quality loan originators want funding from Mintos, high quality loan originators don’t want to share their data with competitors (Mintos majority owners own also half of Mintos loan originators, and can use data from other LOs for their benefit) and some are not happy with the way Mintos operates. I know about 3 loan originators that plan to either launch their own P2P platforms or just leave Mintos.
But also some positive things:
EstateGuru is focused only on 1 segment - real estate, Mintos is a marketplace and has larger addressable market
Mintos plans to add new products - ETFs, possibly something else later as well.
It is complicated to invest in many platforms/systems, if Mintos could cover the basic needs of an average retail investor with low fees and several asset classes - maybe they could become the next Revolut or Robinhood.
Mintos angel investors are good at execution - just look at 4finance and Mogo.
Mintos is a market leader in consumer loan segment in Europe
Of course, negative points won’t be advertised on the pitch deck, and we are talking about Crowdcube platform and their investors - the same crowd that funded IBAN Wallet in 2 campaigns, so in general I expect a high valuation.
What was the last valuation?
No idea, but Mintos so far has raised about 5-6m €, and given away more than 50% of equity to it’s 4 angel investors:
What are my predictions?
My predicted valuation: 215m - 20% = 172 million EUR, about 6x higher than in EstateGuru case.
Mintos will set 1 million EUR target for Crowdcube campaign (already announced), but interest will be bigger and Mintos will raise 3-5 million from Crowdcube.
Mintos will raise another 10-15 million EUR from VCs, and they will get a discounted valuation when compared to Crowdcube.
Can you do better?
Write a comment with your prediction about valuation, and the closest guess will get a lifetime paid subscription to this blog. You must comment before the real valuation is announced at 12:00 CET, Nov 5th, 2020.
Update @ Nov 5th
I was way too optimistic. Mintos pre-money valuation is 68 million EUR.
Congrats to Kriss, his guess was the closest:
1) 100m as valuation guestimate. If they truly get external VCs a ka proffesional investors, that should push valuation towards more humble number.
2) Market standard is that same round investors get same terms, thus Crowdcube investors should get same valuation as VCs. Only difference could be caused by Crowdcube charging a fee.
3) I think this Crowdcube campaign is mostly about community outreach/PR, not so much to attract cheap capital, then no reason to expect unfavorable terms. Mintos may be copying Monzo example https://www.crowdcube.com/explore/raising/success-stories/monzo
P.S. Join “High-risk investments“ Telegram group for an informal discussion.