Key takeaways from Robo.cash live webcast #3
On March 12, the Deputy CFO Robocash Group Grigorii Shikunov held a webcast for investors dedicated to the results of Robo.cash platform and the group in 2020. Grigorii also discussed our plans for 2021. Here, we are providing its key takeaways.
Robo.cash investment platform in 2020 & plans for 2021
Although difficult, 2020 was a breakthrough year for Robo.cash. The platform passed several milestones, and set 2 new records. In Q4 2020 the QoQ growth of net deposits reached 68%, while the volume of funded loans rose by 49%.
In 2021, we plan to attract 13 mln EUR of net investment, integrate new loan originators and keep on improving our service and communication to benefit investors and the P2P industry in Europe.
Robocash Group: never-stopping growth
Our mother holding showed outstanding results in 2020.
• Loans disbursals grew by 6% YoY in 2020, bringing the total amount of loans issued in 2020 to 322.5 mln USD. The revenue totalled to 129.8 mln USD.
• The increased efficiency of the group allowed us to generate the profit of 23.8 mln USD, which is a 50% growth compared to 2019.
• Total assets gained 57% from the result of 2019 to reach 94.5 mln USD.
• The retained earnings rose by 50% too, reaching 42.2 mln USD.
When faced with the corona crisis, we focused on efficiency and made the quality of our portfolio increase significantly, which is the key driver for growing profits. What is more, this has formed a solid basis for the group’s growth in 2021.
Forecast & plans for 2021
We expect to double all our key results this year, bringing the yearly issued principal to 789 mln USD, revenue - to 300 mln USD, and net profit to 46 mln USD.
As a group, we are going to release audited financial statements for 2020 in Q2 this year and launch a new online lending service in Sri Lanka. We are also planning to launch a digital bank based on our in-house developed software.
Questions and answers
Following up on the Q&A session that took place on the webcast, we are providing the key points from Grigorii’s answers grouped by topics.
Long-term strategies to provide good interest rates for customers in the future
The good interest rates on the platform depend on the group’s success, and the group’s strategy is to exploit our competitive advantage to achieve maximum efficiency. In short, our competitive advantage is the perfect balance between 2 main problems of the micro consumer lending business: lending to a borrower who won’t pay back, and refusing to give a loan to a solicitor who would have actually returned it. Our professional risk department manages to keep this balance, and that is why Robocash Group keeps growing and making profits.
Group Guarantee and how it works
In the case of Robo.cash, the Group guarantees obligations of its loan originators via direct participation in capital. We have the advantage of monitoring the loan originator's financial flows directly, and preempt any threats to investors' funds in advance. As a Group, we have total control over our loan originators, and we have ample capital to cover our obligations to investors. And we have audited financial statements to confirm both statements.
Risk scores are mostly associated with borrowers, and at Robo.cash, such risks are covered by the Buyback guarantee. Alternatively, a risk score can be attributed to the risk of default of the lender itself, and this is where the Group Guarantee activates, which has been explained previously. Seeing this, we do not see much value in adding a risk score on the platform.
We see that many investors diversify on several P2P platforms, and they are mostly not willing to add another app to their smartphone, which is why we do not plan to release an app in the nearest months. However, if we see rising demand, we will consider developing one.
Growth while being underleveraged and plans to raise equity
As we reinvented our business model in 2020, we discovered huge efficiencies in it. This was one of the reasons why we decided to postpone the IPO. The additional capital we need for expansion is actually less than we initially planned to raise, which says a lot about the company’s efficiency. We can expand without becoming overleveraged.
We do plan to raise equity, but only after we proceed with our debt raising program. Recently, we raised 300 mln rubles (roughly 4mln USD) on Moscow stock exchange, where we placed bonds, and now we consider doing it outside Russia to build some history with the financial market. We will raise equity in the form of IPO, of which we will communicate separately. The time is still undecided, but we expect to hold the IPO no earlier than the end of this year.
You can find the presentation for the webcast here. The webcast recording is available on our YouTube channel.