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#Ecommerce 
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> penetration reached 27% https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> in Q2 & #39;20
This BOOSTED $SHOPhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> $AMZN https://abs.twimg.com/emoji/v2/... draggable="false" alt="📦" title="Paket" aria-label="Emoji: Paket"> $SE https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌏" title="Asien-Australien auf dem Globus" aria-label="Emoji: Asien-Australien auf dem Globus">
But who has ALSO benefited from the shift to this VIRTUAL WORLDhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💳" title="Kreditkarte" aria-label="Emoji: Kreditkarte"> Payment & Financial Solutions https://abs.twimg.com/emoji/v2/... draggable="false" alt="💰" title="Geldsack" aria-label="Emoji: Geldsack">
Let’s talk about $ADYEYhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">
This BOOSTED $SHOP
But who has ALSO benefited from the shift to this VIRTUAL WORLD
Let’s talk about $ADYEY
penetration reached 27% https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> in Q2 & #39;20This BOOSTED $SHOP https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> $AMZN https://abs.twimg.com/emoji/v2/... draggable="false" alt="📦" title="Paket" aria-label="Emoji: Paket"> $SE https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌏" title="Asien-Australien auf dem Globus" aria-label="Emoji: Asien-Australien auf dem Globus">But who has ALSO benefited from the shift to this VIRTUAL WORLD https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen">https://abs.twimg.com/emoji/v2/... draggable="false" alt="💳" title="Kreditkarte" aria-label="Emoji: Kreditkarte"> Payment & Financial Solutions https://abs.twimg.com/emoji/v2/... draggable="false" alt="💰" title="Geldsack" aria-label="Emoji: Geldsack">Let’s talk about $ADYEY https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">" title=" #Ecommerce https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> penetration reached 27% https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> in Q2 & #39;20This BOOSTED $SHOP https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> $AMZN https://abs.twimg.com/emoji/v2/... draggable="false" alt="📦" title="Paket" aria-label="Emoji: Paket"> $SE https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌏" title="Asien-Australien auf dem Globus" aria-label="Emoji: Asien-Australien auf dem Globus">But who has ALSO benefited from the shift to this VIRTUAL WORLD https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen">https://abs.twimg.com/emoji/v2/... draggable="false" alt="💳" title="Kreditkarte" aria-label="Emoji: Kreditkarte"> Payment & Financial Solutions https://abs.twimg.com/emoji/v2/... draggable="false" alt="💰" title="Geldsack" aria-label="Emoji: Geldsack">Let’s talk about $ADYEY https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">" class="img-responsive" style="max-width:100%;"/>
$ADYEY was founded in 2006 by Arnout Schuijff and Pieter van der Does https://abs.twimg.com/emoji/v2/... draggable="false" alt="👥" title="Silhouette von Büsten" aria-label="Emoji: Silhouette von Büsten">
Before starting Adyen, Pieter was the Chief Commerce Officerhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👨💼" title="Man office worker" aria-label="Emoji: Man office worker"> at Bibit and Arnout was a Systems Architect https://abs.twimg.com/emoji/v2/... draggable="false" alt="👨💻" title="Man technologist" aria-label="Emoji: Man technologist">
Fair to say, $ADYEY was founded by industry veteranshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="⚙️" title="Zahnrad" aria-label="Emoji: Zahnrad">
Before starting Adyen, Pieter was the Chief Commerce Officer
Fair to say, $ADYEY was founded by industry veterans
But what does $ADYEY do? Let’s dive into payment solutions https://abs.twimg.com/emoji/v2/... draggable="false" alt="💳" title="Kreditkarte" aria-label="Emoji: Kreditkarte">
Let’s say you want to start selling the beautiful clotheshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👚" title="Damenbekleidung" aria-label="Emoji: Damenbekleidung">https://abs.twimg.com/emoji/v2/... draggable="false" alt="👕" title="T-Shirt" aria-label="Emoji: T-Shirt"> you design as a side project
First things first, you set up a $SHOP websitehttps://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> and start accepting payments with Shopify Payments https://abs.twimg.com/emoji/v2/... draggable="false" alt="💳" title="Kreditkarte" aria-label="Emoji: Kreditkarte">
Let’s say you want to start selling the beautiful clothes
First things first, you set up a $SHOP website
Things are going well and you decide to open a retail location https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏬" title="Kaufhaus" aria-label="Emoji: Kaufhaus"> and start selling abroad https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌎" title="Amerika auf dem Globus" aria-label="Emoji: Amerika auf dem Globus">
Now, you need to accept in-person paymentshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👥" title="Silhouette von Büsten" aria-label="Emoji: Silhouette von Büsten"> and foreign cards https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌐" title="Weltkugel mit Längengraden" aria-label="Emoji: Weltkugel mit Längengraden">
This is still possible with $SHOP point-of-salehttps://abs.twimg.com/emoji/v2/... draggable="false" alt="📟" title="Pager" aria-label="Emoji: Pager"> and Shopify Payments which is available in 16 countries https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏳️" title="Wehende weiße Flagge" aria-label="Emoji: Wehende weiße Flagge">
Now, you need to accept in-person payments
This is still possible with $SHOP point-of-sale
For now, everything is running just fine but you don’t want to be limited by $SHOP reach of 16 countries
You have an IDEAhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="💡" title="Elektrische Glühbirne" aria-label="Emoji: Elektrische Glühbirne"> Now that your sales are good https://abs.twimg.com/emoji/v2/... draggable="false" alt="💸" title="Geld mit Flügeln" aria-label="Emoji: Geld mit Flügeln"> You decide to build your own website
This way, you can customisehttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🖌" title="Farbpinsel unten links" aria-label="Emoji: Farbpinsel unten links"> it as you want and add all the features you want https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚙️" title="Zahnrad" aria-label="Emoji: Zahnrad">
You have an IDEA
This way, you can customise
But wait https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen"> Who is going to take care of the collecting payments now? https://abs.twimg.com/emoji/v2/... draggable="false" alt="💳" title="Kreditkarte" aria-label="Emoji: Kreditkarte">
Since you are not a *World Class Business* yethttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🌐" title="Weltkugel mit Längengraden" aria-label="Emoji: Weltkugel mit Längengraden"> you want a simple payment solution you can install overnight https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚡️" title="Hochspannungszeichen" aria-label="Emoji: Hochspannungszeichen">
Since you are not a *World Class Business* yet
Here is a small note
Ok, let’s say that the small clothing brand you started grew to become Nike https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏃" title="Person running" aria-label="Emoji: Person running">
You now have thousands of shopshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🏬" title="Kaufhaus" aria-label="Emoji: Kaufhaus"> and accept payments in lots of countries https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌐" title="Weltkugel mit Längengraden" aria-label="Emoji: Weltkugel mit Längengraden">
Your POS system is fragmented, you rely on different payment gateways, service providers, acquirers and processorshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🤯" title="Explodierender Kopf" aria-label="Emoji: Explodierender Kopf">
You now have thousands of shops
Your POS system is fragmented, you rely on different payment gateways, service providers, acquirers and processors
To keep it short, since you now run *OMNI-CHANNEL* operations (online, physical stores) on a *GLOBAL* scale https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌐" title="Weltkugel mit Längengraden" aria-label="Emoji: Weltkugel mit Längengraden"> You have 3 problems https://abs.twimg.com/emoji/v2/... draggable="false" alt="‼️" title="Doppeltes Ausrufezeichen" aria-label="Emoji: Doppeltes Ausrufezeichen">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="1️⃣" title="Tastenkappe Ziffer 1" aria-label="Emoji: Tastenkappe Ziffer 1"> Your global POS system is fragmented among lots of intermediaries https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔀" title="Verbogene nach rechts zeigende Pfeile" aria-label="Emoji: Verbogene nach rechts zeigende Pfeile"> (payment gateways, service providers, acquirers, processors)
What did Nike do? They worked with $ADYEY https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Adyen is a payment gateway, service provider, acquirer and processor for online https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌐" title="Weltkugel mit Längengraden" aria-label="Emoji: Weltkugel mit Längengraden"> and physical shops https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏬" title="Kaufhaus" aria-label="Emoji: Kaufhaus">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> It just requires 1 system, 1 process integration and 1 contract for ANY company
Of course, every single startup would sign up with $ADYEY if it was that simple https://abs.twimg.com/emoji/v2/... draggable="false" alt="💡" title="Elektrische Glühbirne" aria-label="Emoji: Elektrische Glühbirne">
Here’s why Stripe is more popular with SMB and Adyen caters to med and large businesshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
Here’s why Stripe is more popular with SMB and Adyen caters to med and large business
When using Stripe, your business’ funds are deposited into a single merchant account, along with the funds of other business https://abs.twimg.com/emoji/v2/... draggable="false" alt="👥" title="Silhouette von Büsten" aria-label="Emoji: Silhouette von Büsten">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📲" title="Mobiltelefon mit nach rechts zeigendem Pfeil auf der linken Seite" aria-label="Emoji: Mobiltelefon mit nach rechts zeigendem Pfeil auf der linken Seite"> Stripe then transfers these funds minus their fees to your business bank account
When using Adyen, you need to set up a merchant account https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏦" title="Bank" aria-label="Emoji: Bank"> Your funds are then deposited into your merchant account directly https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💰" title="Geldsack" aria-label="Emoji: Geldsack"> Adyen’s fees are often limited to the Interchange++ fees (and $ADYEY own fees)
Here is a more schematic explanation
Adyen is more complex to set up but offers a more robust and more complete solution than StripeHere is a more schematic explanation https://abs.twimg.com/emoji/v2/... draggable="false" alt="📊" title="Balkendiagramm" aria-label="Emoji: Balkendiagramm"> (taken from Capital Market Day, April 12 2019)" title="https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚙️" title="Zahnrad" aria-label="Emoji: Zahnrad"> Adyen is more complex to set up but offers a more robust and more complete solution than StripeHere is a more schematic explanation https://abs.twimg.com/emoji/v2/... draggable="false" alt="📊" title="Balkendiagramm" aria-label="Emoji: Balkendiagramm"> (taken from Capital Market Day, April 12 2019)" class="img-responsive" style="max-width:100%;"/>
If you just discovered a passion for Merchant Accounts, here is all you have to know https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> https://www.fundera.com/blog/merchant-account">https://www.fundera.com/blog/merc...
So by now this whole payment solutions thing should be clarified and the “WHY” of Adyen should also be clear
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Adyen acts as a single solution for all payments (online and physical) on a global scale
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> It is more complex but cheaper, more robust and more focussed on payments
This strategy pays off and translates into the following numbers for the first half of 2020 (H1 ’20)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> Processed volume at € 129B - a 23% YoY increase
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💸" title="Geld mit Flügeln" aria-label="Emoji: Geld mit Flügeln"> Net revenue at € 280m - a 27% YoY increase
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💰" title="Geldsack" aria-label="Emoji: Geldsack">EBITDA at € 141m - a 12% YoY increase
On these numbers https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="1️⃣" title="Tastenkappe Ziffer 1" aria-label="Emoji: Tastenkappe Ziffer 1"> $ADYEY was affected by #COVID more than $SHOP $AMZN as they also provide payment solutions to physical shops and travel, hospitality industry
https://abs.twimg.com/emoji/v2/... draggable="false" alt="2️⃣" title="Tastenkappe Ziffer 2" aria-label="Emoji: Tastenkappe Ziffer 2"> $ADYEY is by no means cheap, trading at a PE of 227 but delivers a Return on Equity (average 5Y) of 26%
In order to justify its valuation $ADYEY needs to deliver https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚡️" title="Hochspannungszeichen" aria-label="Emoji: Hochspannungszeichen"> What’s in the box?
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Winning key customers $MSFT $SPOT $ETSY $UBER $BKNG $FVRR $FTCH $EBAY
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Focussing on creating the best platform, here is a testimony from Spreedly https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
"Adyen is laser focused on payment processing and doing everything they can to improve payment processing. They discuss success and decline rates and what they can do to improve them for you today and over time, higher cart conversion [...] and so on."
Hope you liked this thread!
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> For more content, follow us on Twitter
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Want to get UNDER HYPED companies delivered straight to your inbox? Subscribe now! https://getbenchmark.substack.com"> https://getbenchmark.substack.com
Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ Fundera
Sources
✑ Investor presentation
✑ Company website
✑ Fundera
