TIVP032: Remitly (RELY): Future Multibagger or Stablecoin Casualty? w/ Daniel Mahncke & Shawn O’Malley
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Stablecoins vs Traditional Payments
This chapter examines the role of stablecoins in payment transactions, comparing them to traditional methods like PayPal and credit cards. It discusses the challenges stablecoins face in consumer adoption and cross-border transfers, while reflecting on their potential future in the evolving payment landscape.
Daniel & Shawn dive into Remitly, the digital remittance platform aiming to disrupt a $2 trillion global market. After years of prioritizing customer acquisition and corridor expansion over profits, Remitly is now approaching a critical inflection point, one where scale, margin leverage, and cash generation could unlock a new phase of investor confidence. But there are risks as well: crypto-native challengers, regulatory uncertainty, and broader concerns about the remittance industry all raise the question of whether the upside is worth the risk.
Here, they unpack Remitly’s moat, including its direct payout network, risk engine, and customer trust, and assess whether these factors are enough to fend off cheaper, faster payment rails, such as stablecoins. They walk through the company’s unit economics and what the valuation model implies under both steady-state and high-growth scenarios. Along the way, they compare Remitly’s customer lock-in strategy to Booking.com, examine the remittance corridor dynamics in India, the Philippines, and Latin America, and debate whether this is a misunderstood fintech with enduring staying power or a product ripe for crypto disruption.
IN THIS EPISODE, YOU’LL LEARN
00:00 – Intro
01:08 – How the remittance market works
01:50 – Why Western Union struggles to compete with Remitly
02:16 – Why and how Remitly was founded
04:48 – What risks Remitly faces
05:01 – How stablecoins could disrupt the remittance industry
11:34 – What competitive advantages Remitly has
17:16 – What digital-first companies compete with Remitly
24:37 – Why scale is everything in the payments sector
27:56 – Whether Remitly is attractively valued at its current levels
29:27 – Whether Shawn & Daniel add RELY to The Intrinsic Value Portfolio
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
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- Value Investor’s Club Article on RELY.
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- Dive into Pernas' Research Article on RELY
- Explore our previous Intrinsic Value breakdowns: Uber, Nike, Reddit, Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
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