MoneySmart posts two profitable quarters in the thick of a pandemic

Singapore-based financial aggregator MoneySmart has posted two consecutive profitable quarters, according to CEO Vinod Nair, in spite of a pandemic that had battered the demand for financial products and services in the first half of last year.

The platform, which earns a commission fee from commercial banks and insurers through successful customer sign-ups, said its EBITDA (earnings before interest, taxes, depreciation, and amortization) was positive in Q4 2020 and the first quarter of this year.

MoneySmart CEO Vinod Nair / Photo credit: MoneySmart

“Seasonally, Q4 is a high and Q1 is typically a low,” Nair tells Tech in Asia. MoneySmart was not profitable in both periods in the preceding year.

After raising significant venture capital in 2017, the company registered growing revenue and losses for three straight years. “About S$4.4 million (US$3.3 million) of costs in 2019 were due to a write-off and restructuring we did,” Nair explains. It had sold its Indonesian business to Lifepal and exited the market that year.

Since then, operating losses – measured in EBIT – have declined substantially. The firm expects them to shrink further to -S$490,000 (-US$370,000) in 2021 as it dials down on “strategic projects in insurance” to drive long-term growth.

The firm is now tracking an annualized revenue run rate of S$32 million (US$24.2 million). Between 2019 and 2020, MoneySmart’s revenue grew 23% year on year – a “modest” increase as a result of the pandemic, Nair says.

Still, this could be considered a decent showing considering the challenging year financial aggregator sites have had.

In January, GoBear, a competitor platform, announced a sudden closure amid a sharp decrease in demand for financial products, mounting costs, and a failure to raise additional capital. It has since been acquired by Australian fintech platform Finder.

Nair attributes MoneySmart’s strong showing to the company being “focused.”

“We had to make very tough trade-offs [and decide that] we were not going to focus on developing some of the smaller verticals to double down on the ones we thought could work. And thankfully, it paid off,” he says.

Company-wide pay cut