Newly public company Remitly Global (RELY +1.27%) is focused on remittance services with a mission of improving the lives of immigrants and their families through trusted financial services.
In this video clip from Motley Fool Live, recorded on March 11, Motley Fool contributor Matthew Frankel, CFP®, interviews Remitly CEO Matthew Oppenheimer, and asks about the company's path to profitability.
Matt Frankel: Your growth has been really impressive. That's not a question, but just to say. Your growth has been very impressive. Your customer count, I think increased 50% over the past year alone. Revenue's up something like, I think 78% is the number I have in my mind. But you're at least not yet a profitable business. You're doing a lot of good in the world. You are growing fast, and that's fantastic. But if we can do good and make money then that's the best combination we can do. Do you see a path to profitability? How long should investors expect and how do you see yourselves getting there? I know the culture probably it's a lot to do with it.
Matt Oppenheimer: Yeah. Absolutely. I think it's culture and it certainly understanding the various levers in our business. If you look at the three areas that we're investing in, we're very intentional about those areas. It is continued growth at great unit economics, meaning we spend X in customer acquisition. We get Y in terms of lifetime value with a lot of rigor and analytics, one of our values is data-driven around that investment. If you look at 2020 or 2021 and you look at our marketing spend as a percentage of our overall profitability, a lot of that marketing is going toward direct new customer acquisition. That's something we can dial up or down, depending on how fast we want to grow and how, how profitable we want to become. Given that we're 1% of the market, given that for every dollar we're investing, we're getting $6 back in lifetime value and a five-year window and a lot of customers stay a lot longer than that. That's one.
Second is geographic expansion. We're in 2,100 corridors, 700 were launched in the last year. Now that we have that foundation that I talked about laying very early in the business, and this repeatable corridor expansion playbook, investing in that will create a bigger pie over time for us even though it impacts shorter-term profitability. The third is new products and services both really reinventing the rails have permits. Such that we build true peace of mind with customers, with every customer and broad financial services for immigrants. What I like about those three areas is there're on various timelines of returns, so to speak. But they're all very intentional, very data-driven and I think it's super-important that investors, that obviously management understands the levers around profitability. What I like about our business is that we are spending to grow, but it's in a very disciplined way with the idea that we can build a much larger business over time. That's the right thing for our business, right thing for our customers, right things for our shareholders.
