American digital financial platform MoneyLion announced a merger with the blank check acquisition company Fusion Acquisition Corp (NYSE: FUSE) on Friday.
The SPAC Deal: MoneyLion is valued at $2.4 billion in the merger, which will give the company $500 million in gross proceeds.
Fusion Acquisition is led by Jim Ross who worked at State Street Corporation (NYSE: STT) for over 20 years. Ross is considered an ETF pioneer, bringing to market two of the most popular ETFs: the SPDR S&P 500 ETF (NYSE: SPY) and SPDR Gold Trust (NYSE: GLD).
Current Fusion Acquisition shareholders will own 12% of MoneyLion after the merger.
About MoneyLion: MoneyLion caters to middle-class Americans with products covering mobile banking (RoarMoney), investing, instacash salary advances and a credit builder platform. Credit Builder Plus boosts users credit by more than 60 points in 60 days in 50% of cases, the company said.
The company has over 1.4 million customers.
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Growth Ahead: MoneyLion is set to launch several new products in 2021 that could help its growth plans.
A secured credit card offering with limits of $250 to $10,000 will launch for MoneyLion customers in 2021.
The company says it will launch a crypto platform this year. The platform would allow customers to trade and earn rewards in digital assets, and use a crypto wallet for person-to-person payments.
Launching more products could be a major catalyst as the company gets higher average revenue per user for each additional product used. The company has an average revenue per user of $148. That figure rises to $200 and $248, respectively, for customers who use two or more and three or more products.
Financials: Adjusted revenue was $76 million for MoneyLion in fiscal 2020. Fiscal 2021 revenue is estimated at $144 million, up 88% year-over-year.
Revenue growth was +113% year-over-year, +59% year-over-year, +56% year-over-year and +60% year-over-year in the four respective quarters of fiscal 2020.
The SPAC merger values MoneyLion at 16.5x estimated 2021 revenue and 9x estimated 2022 revenue.
Price Action: Shares of Fusion Acquisition Corp were down 5% to $11.59 on Friday.
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