Yodlee IPO $YDLE the picks and shovels of Fintech

Yodlee is one of four in my Fintech IPO watch list and the first to actually go public.

The much bigger Lending Club IPO is next on the calendar.

However Yodlee is first out of the gate.

Here are the key facts:

  • Consumers don’t know Yodlee, but developers and entrepreneurs and Bankers are quite familiar with Yodlee. This is a white label service. That is why I describe this as the “picks and shovels” of Fintech. You use Yodlee to retrieve data from multiple banks for applications such as Personal Financial Management (PFM).
  • Founded in 1999, by mostly ex Microsoft guys, so the white label platform play makes sense. This was before social media and mobile made it so cheap to reach consumers directly and the biggest tech successes such as Microsoft had been platforms, so a white label strategy made sense.
  • Revenue in 2013 was $70.2m, 21% increase on 2012, small loss of $1.2m. Not massive growth but enough to hit profitability pretty soon.
  • Built into their customer’s processes so revenue visibility is good. Partnered with Y Combinator so they get a mix of high potential startups with steady bank customers.
  • 14% of revenue from Bank of America which is also a shareholder.
  • Headline says, “soared 45%”, but then it dropped back to 12% up on the day. Sounds like a reasonable start. This week will show what Mr. Market’s verdict is on Yodlee.

I have no idea yet whether Yodlee is a good or bad valuation, I will be digging into that later.


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