MoneyLion CEO reports path to profitability

MoneyLion is a New York-based leader in financial technology powering cutting-edge personalized products and content. The company’s super-app offers a comprehensive suite of financing services, an embedded finance platform & API for enterprise businesses, and a media arm producing in-house content for financial literacy and planning. Founded in 2013, MoneyLion has been listed on the New York Stock Exchange (NYSE: ML) after going public via a $2.9B SPAC merger in 2021, though share prices have decreased over 90% from their all-time high. 

In an interview with The Financial Revolutionist, Dee Choubey, MoneyLion’s Co-Founder and CEO, outlines his company’s response to the current banking crisis, discusses the super-app giant’s public-market performance, and predicts MoneyLion’s path forward in the coming year. 

This interview has been edited for length and clarity.

The Financial Revolutionist: It’s worth starting off hearing your thoughts on the SVB and Signature Bank crisis.

We're a leader in financial technology, and whenever you’re in fintech, chances are you’re going to have some involvement with Silicon Valley Bank. I said in a call this morning with analysts and investors that, like the largest players in fintech, we processed through Silicon Valley Bank. We started getting wind of rumblings probably midday Thursday, and we alerted our teams; by around 10 am Friday—and this is really a testament to our team and the redundancies that are built into the product—we were off operational reliance on Silicon Valley, before the news of the receivership was out. 

I know you work with Pathward for banking. Could you walk me through what processing was done through SVB versus other banking partners? And what redundancies were in place that made that transition away from SVB so seamless?

MoneyLion is foremost a leading super-app. The digital bank is one of many things that we provide. We have a broker dealer, we have an RIA. All of them have their own payment rails and their own tech stacks. So yes, we do have a relationship with Pathward which is very public, and we use processing through another agent there. The processing that I'm talking about has to do with our credit products. And that technology is completely proprietary—the ledgering, the payments capabilities. 

The interesting thing is: We're going to try to take the payments rails that we have built for ourselves—where billions of dollars in credits and debits go through every year—and we’re now going to try to make them available for enterprise clients as well. That's the opportunity that came out of the 72 hours of pain that we went through.

Last question before digging into your earnings: To what extent have you had to do any sort of B2C crisis management in the wake of this banking crisis?

We do see our creators on our content feed really taking this opportunity to explain it and demystifying what FDIC insurance and other insurances all mean. We're taking the opportunity to educate our consumers. And of course, we've had comms going out about how safe our capital is—but our core consumer who banks with us is usually not coming up on that being a concern for them.

As far as your earnings go, it seems like the public-market reaction has been relatively positive. In your eyes, what explains this sort of investor optimism?

A couple of things: We clearly don't like where the stock price is. Even 100%, 200%, 300% over where we trade right now I think is undervaluing MoneyLion and the data assets that we have and what we’ve put together here. But that said, I think that right now there’s a lot of investor skepticism about anything growth tech, right. We're taking the view that we're going to continue executing, just like we executed in Q4. At some point that's a pretty attractive business with a revenue profile approaching a 20% to 30% EBITDA margin in the medium term, and highly diversified between consumer and enterprise. That's what should give people optimism. 

I'm probably the most enthused I've been in a long time. 2022 was a tough year. It was one of the toughest operating environments we've seen in decades, if not centuries, if you think about both the bond and the equity market dislocation. But that said, we continued executing. It's a good team that we have here. We're doing important work. It’s a great set of data assets. And at some point, it's going to compound into real results for real users.

Where are these projections primarily coming from? Is it greater engagement? Is it more users? New products?

It’s more users, but the interesting thing about us is that we haven’t relied so much on having to continuously go and market at the same scale and level as a lot of our competitors. A year ago, we bought a company called Even Financial, which is a two-sided marketplace providing a one-stop matching engine between suppliers and consumer leads. These are usually folks like CNBC.com, Fortune, Forbes, that are capturing intent. And then they’re using matching technology to match directly with demand partners—credit card companies, insurance, personal loans, high-yield savings—that generates anywhere from 28 to 35 million inquiries per quarter. We’ll route those users or we'll try to convince them to come through our mobile app as a leading mobile app in America right now, and then we’ll try and re-engage them with our first-party products. That keeps our customer acquisition costs super low. Our marketing costs came down from 2021 to 2022, but we added 1.8 million customers for the year, which really helped us accelerate the overall margin profile of the business.

Are you switching essentially to a content-driven acquisition model, then? You have MoneyLion University and Money Academy as these different drivers. Are those the things that you're doubling down on to achieve profitability?

Yes, 100%. The marketplace through Even allows us to interact with a lot more consumers in super cost-effective ways. And then our creator network engages and retains our user multiple times—so even if folks aren't using the MoneyLion consumer app, they're coming back to engage with content, and more times than not, we're able to provide them some insight about how they're spending or how they're how they're saving to match them with third-party products. 

We just launched a driver score, which tells you how well you're driving, and based on that it'll basically show you replacement insurance products with how much you’ll save a month. Those types of features showcase our ability to continue innovating and creating the next feature and having it all as part of the ecosystem. Plus, now our sales and distribution capabilities to have the entire monopoly of American financial products in our ecosystem are what drive that virtuous cycle.

So telemetrics is one recent product development. Are there other things in the pipeline that you think can contribute to profitability and growth in the coming year?

In ‘21 and ‘22 we innovated a lot, whether it’s digital banking, all types of investing capabilities, or crypto rewards. Moving forward, we're really going to be focused on the delivery of those capabilities: how can we go to an American household and say we're the definitive Costco of finance, the Amazon Prime of finance, for all of your financial inflection points. 

We're relaunching our core membership product. In the next couple of months, we'll be launching it broadly at an attractive $9.99 per month price point, which gives you so much value that you never really need to go to another financial platform. It will include banking, investing, content, literacy, perks, offers, and more. It's going to be a little bit boring on the feature development side, but much more exciting on the distribution and delivery of the products in a bundle format.

Any final insights?

One of the things that we keep saying is that, when we went public back in 2021, we told the markets that we would be growing fast and then turning profitable in 2024 or 2025. Now, our unit economics are really best in class. We've reduced our reliance on marketing on Facebook and Amazon and Google to acquire customers. We now acquire them through our own walled garden, and leveraging that ecosystem really positions us well. I don't think it shows up in how we trade yet. 

I think we still get a lot of the strikes from being a SPAC and being a high-growth tech company. And now, unfortunately, we get lumped a little bit into the banking world. But the assets that we've put here really position us to be the interface layer for the consumer, the daily destination for money, advice, money, content, money hacks. So we feel very good about where we are, and we’ll continue executing.