- MoneyLion went public via a SPAC in September. Its stock price has dropped 80% since to $1.58.
- The company acquired Malka Media and Even Financial months later to boost its product offering.
- MoneyLion’s CEO told Insider that the integration made some jobs within MoneyLion redundant.
The personal finance app MoneyLion is looking to scale up, just a year after going public. High turnover and a sinking stock price, however, present challenges for the New York-based startup.
Its CEO and cofounder Dee Choubey is betting that its two latest acquisitions will help right the ship and make the startup the go-to app for financial content. The company acquired Malka Media, a digital media company, last November, and months later acquired Even Financial, a financial services marketplace, in February.
The integration of the acquisitions of has led to a handful of layoffs. Choubey said the company let go of 2% of its US staff this year. For a company that has over 400 employees located in the US out of its 751 globally, that amounts to roughly 10 employees. Separately, Insider found over 65 people in total had exited MoneyLion and its two subsidiaries during that period through an analysis of LinkedIn. A former employee on the product team who left in June told Insider that employees, some of which were managers, were being let go as early as February and as recently as July.
“When you acquire two companies there are some opportunities to consolidate shared services,” said Choubey.
Choubey told Insider the market environment had little influence and the company would have done layoffs regardless. “It’s never an easy decision,” he said, “but just for efficiency in getting the teams to work together there were certainly some moves that we made on the personnel side,” he told Insider.
He believes MoneyLion can be the go-to destination for curated personal finance content. To help with that, the company acquired Malka for its in-house production studios located in Los Angeles and Jersey City and the company’s network of content creators and influencers, including professional athletes. Having a studio lowers production costs for a company eager to produce content through its own platforms and those of its partnerships. The access to content creators and influencers gives the company “ambassadors” who are expected to promote MoneyLion to their followings on other platforms.
The personal finance startup bought Even Financial for its recommendation engine, which plays digital matchmaker between financial products and consumers. Even, started in 2015, has a network of over 1,000 companies that include SoFi and LendingClub.
“The widgets that exist on websites like CNBC.com or Insider.com are oftentimes powered by us. And that allows us to see massive amounts of intent data,” he said.
That intent data, behavioral data that indicates what a user is interested in, feeds into MoneyLion’s other products and services, helping to improve them for users.
MoneyLion, founded in 2013, went public in 2021 through a SPAC deal with Fusion Acquisition Corp. that valued the company at $2.9 billion. Its stock price has since plummeted 80% and, as of Tuesday morning was trading at $1.58 trades per share, bringing its market capitalization to a little under $400 million.
CEO Choubey told Insider in December that he thought it was a “broad changing of the guard, if you will, where the stock is going from short-term speculative hedge funds, or people that were trading this SPAC asset class, more into long-term holders.”
Equity markets have had a choppy year so far, with tech companies, in particular, being hard hit. MoneyLion’s stock has been no exception.
“Things changed with interest rates increasing and the iron law of interest rates really modulates how investors think about risk,” Choubey said in August.
The company is flourishing in other ways, however, he said. It has 5 million customers using its financial accounts, according to recent earnings. Almost doubling from 2.7 million in December. And despite its high expense budget that overshadows its revenue, its balance sheet holds $217 million. Choubey disclosed that MoneyLion expects to burn about $30 million in the second half of the year, leaving it with well over $100 million for 2023.
“Even by the end of the year, we’re still exiting with a significant amount of cash,” Choubey said.
The company aims to reach $1 billion in revenue by 2025, the CEO told Insider. Its second-quarter earnings statement shows the company estimates it will surpass $330 million by year’s end, which is a 103% increase from $165 million last year.