News about Adyen, Sea, Cloudflare, The Trade Desk And Nubank
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On my paying service, Potential Multibaggers, I have the Overview Of The Week each Sunday. I share some tidbits from that OOTW here for free. If you want to read everything (almost 1,000 articles and counting!) on Potential Multibaggers, there’s a 2-week free trial and a 20% discount if you use this link.
Of course, you can also follow along here for some tidbits.
Adyen Partners with Cover Genius
There was news of another partnership this week between Adyen and Cover Genius, which is an Insurtech platform. Adyen will now be a payment partner offering local payment methods in the Americas, Europe & Asia Pacific, which the company helps will increase its authorization rates.
Specifically, Adyen was selected to implement its fraud and security solution, namely 3 Domain ("3D") Secure. Adyen’s 3D Secure technology uses an authentication engine that creates the right balance between convenience and security by using machine learning to make smart authentication decisions and assess whether a transaction should be authenticated through a streamlined process or a more rigorous one, which in turn boosts conversion.
Cover Genius is an insurtech company that specializes in embedded protection for various industries, including retail, fintech, logistics, and travel. Their main offerings include XCover, a global distribution platform providing insurance and protection services, and an API allowing instant claims payments in over 90 currencies.
Fast-growing fintech with a global footprint needs to boost authorization and conversion rates – who are you gonna call? Ghostbusters! Oh, uhm, no, Adyen! Adyen is one of the leaders in global and localized payments for international companies with distributed customer bases. We don’t know how much this will boost Adyen’s transaction volumes, but this is how they win, become 1 payment partner, and then, through performance at scale in a cost-effective way, win a greater share of the payment wallet. The more, the merrier.
Nu Holdings's 100 Millionth Customer
NU (NU) celebrated its 11th birthday last week by announcing an incredible milestone that it had acquired customer number 100 million across Brazil, Mexico and Colombia, making it the first digital banking platform to reach this milestone outside of Asia.
This is truly incredible. It is remarkable that an 11-year-old company, especially a (sort of) bank, in one of the most oligopolistic regions on the planet can grow this quickly.
Nu celebrated the achievement in the most fashionable way, by advertising on the Sphere in Las Vegas, even though Nu doesn’t operate in the States (hmm, I wonder why they advertised on the Sphere?)
The campaign is called “You are the center of everything” and leverages technology and innovation to highlight real customers’ journeys through an activation on the Exosphere, which, as a reminder, is the world’s largest LED Screen. I can attest from personal experience that it’s so big you can see it from a plane.
The Exosphere activation shows 360 degrees of images of Nubank customers on the exterior of the venue - which is nearly 112 meters high and more than 157 meters wide. That's approximately 367 feet by 515 feet. The faces are formed by purple particles, each of which represents one of Nubank's 100 million customers. Together, they illustrate that Nubank is composed of all their individual stories. Nubank customers will be featured from May 7th to the 14th on the Exosphere, kickstarting additional local campaigns and customers. You can watch this thing in action in this clip.
As David Vélez, founder and CEO of Nu said:
In 2013, we had set ourselves the ambitious goal to reach one million customers in five years, which seemed almost impossible at the time. In a decade, we have surpassed 100 million, which is a testament to the trust our customers place in us and to the power of a truly customer-centric business model. These 100 million customers have written their stories together with ours, and we want to honor them in a special way.
You can check out the materials here - 100Milhões - Nu International (nubank.com.br).
I remember one of the bear arguments against Nu was how successful a Latam-focused neobank could be when the neobanks catering to wealthier Europeans (like Monzo, N26, Revolut, Starling, etc.) have struggled. Apparently, the answer is quite successful! Here’s to the next 100 million.
I also posted this on X (formerly Twitter) and got some negative comments of people calling this a red flag, a waste of money etc. To be a full week on the Sphere costs $640K. That’s 0.065% of the company’s GAAP net income (so profit!) over the last year. In other words, if you have a net income (after taxes!) of $38,600, that’s the equivalent of 25 dollars. For a celebration of the 100 millionth customer that double-serves as marketing, I don’t think this is throwing money away. On Nubank’s YouTube channel, this already had more than 3 million views. On Instagram, the several posts about this had tens of thousands of likes. To me, this is money well spent.
Overall, Nubank spends very little on marketing and customer acquisition. If it does, it makes sure everybody has seen it.
Cloudflare
Cloudflare (NET) made some big announcements this week on the cyber front. That’s right, not the fourth public cloud or resiliency, but cybersecurity, which the old timers here have long considered Cloudflare’s relatively untapped potential.
First, Cloudflare, the Department of the Treasury, and Pacific Northwest National Laboratory (under the Department of Energy) entered into a partnership to share Early Warning Threat Intelligence for Financial Institutions.
How does this work exactly?
We know Cloudflare has FEDRAMP designation and access to government data. That includes custom indicator feeds relating to ransomware, phishing, etc., which the government uses in its own threat intelligence. If you are a private company using a Cloudflare gateway, you now have access to this threat intel as well.
The feed collects advanced insights from the Treasury and federal government's exclusive sources, enriched by Cloudflare's own threat intelligence, gained from unique visibility across internet traffic. Financial institutions are able to integrate approved threat intelligence feeds directly into their Cloudflare dashboard and implement automated DNS filtering policies using Cloudflare Gateway, ensuring their employees are protected from malicious links and phishing attempts targeting financial services organizations.
This is pretty nifty for two reasons:
1. It’s reminiscent of the network effect that helped make Crowdstrike so successful.
2. The government has a lot of data that is already being collected and can be leveraged by private institutions, who otherwise have no way of accessing it other than manually requesting it and ingesting it, which is expensive and time-consuming.
As per Cloudflare’s observations, in Q1’24 alone, there were 41 BILLION HTTP DDoS (Distributed Denial of Service) attacks targeting Banking, Financial Services, and Insurance (known popularly as BFSI), a 57% YoY growth compared to Q1’23. We all know 57% YoY growth is exceptional performance, except in this case, it's coming from criminals, which is less than great.
Now, there is a seamless way to share threat intel and hopefully makes everyone safer.
The second major announcement was that Cloudflare announced a Unified Risk Posture to Provide Comprehensive and Continuous Risk Management at Scale— for Free.
Basically, this is a new suite of risk management solutions that is intended to streamline the process of identifying, evaluating, and managing cyber threats that pose risks to an organization across all environments. Powered by Cloudflare’s rich security suite – including capabilities from Secure Access Service Edge ("SASE") and application security – and paired alongside best-in-class partnerships with CrowdStrike and other leading endpoint and identity management providers, customers can eliminate manual processes and gain a more complete picture of cyber risks to effectively remediate them, from a single platform.
What kind of tools would these be?
* Customize policies based on unique risk scores across users and applications: With AI and machine learning, Cloudflare analyzes real-time user activities and suspicious traffic that passes through the network to identify abnormal behavior and potential indicators of compromise. Security teams can lock down suspicious activity and adapt security posture in the face of changing risk factors and threats.
* Gain a more holistic and complete view of the threat landscape: Cloudflare ingests risk scores from endpoint protection ("EPP") and identity provider ("IDP") partners and shares telemetry back with SIEM and XDR platforms.
* Integrations with tools such as CrowdStrike Falcon Next-Gen SIEM allows customers to tap into deeper analysis and further investigate potential risks – from a unified API.
* Unifying first and third-party data, native threat intelligence, AI and workflow automation, enables overall better threat protection. Enable control locally, on a global scale: Organizations can now instantly enact new risk controls across their entire network, in every time zone, without the need to set up and manage controls in each region they operate. Powered by the Cloudflare global network – one of the largest in the world – Unified Risk Posture supplies unique real-time telemetry to enrich risk posture long-term.
Once again, we see 2 Potential Multibaggers picks partnering with each other to deliver differentiated solutions that are sicky and valuable to clients.
CrowdStrike Falcon Next-Gen SIEM delivers up to 150x faster search performance over legacy SIEMs and products positioned as SIEM alternatives. Our transformative telemetry, paired with Cloudflare’s robust Zero Trust capabilities provides an unprecedented partnership,” said Daniel Bernard, Chief Business Officer at Crowdstrike. “Together, we are converging two of the most critical pieces of the risk management puzzle that organizations of every size must address in order to combat today’s growing threats.
What more can you ask for?
Sea Limited's On-Time Guarantee in Malaysia
I remember the days when Sea's (SE) Shopee was coming up and was treated as a knockoff of Lazada (now owned by Alibaba) and just another local marketplace (there were many) trying to tackle e-commerce through discounts
The joke was that all these companies would just order cheap stuff made in China, and if it eventually made its way to you, that was a good outcome. If it didn’t, well, it was cheap anyway.
My, how far we’ve come. Thanks to the investments Shopee has made in its logistics network as well as sourcing inventory, customers do more of their online shopping on the platform than ever, much more than the likes of Amazon or Lazada.
And the company has issued a challenge to competitors in Malaysia by launching an On-Time Guarantee where the company will give you a shopping voucher (worth 5 RM or about 1.2 USD) if your order is late. This isn’t something the company would do lightly, as Malaysia is a price-sensitive and competitive market, and plenty of people will attempt to test it out.
The On-Time Guarantee program builds upon Shopee’s long-standing commitment to providing a seamless and secure shopping experience for digitally savvy buyers. This includes providing Malaysians with faster and more flexible delivery options, such as next-day delivery, Instant Delivery, and increased Shopee self-collection points. The On-Time Guarantee program features a user-friendly claim process. Each order's estimated delivery date will be clearly displayed on the order details page. If a delivery surpasses this timeframe, buyers can effortlessly claim their RM5 voucher directly through the same page. This streamlined approach ensures buyer satisfaction.
Shopee did a pilot using a pre-launch program and received favorable feedback from those who participated. This level of customer satisfaction is what turned Amazon into an e-commerce behemoth and it’s encouraging to see Shopee expanding its lock-in with customers in its core markets
The Trade Desk Shows Its Strength
For an Ad-tech company, The Trade Desk (TTD) always does a great job of explaining how it delivers value to its clients. It knows that talking about UID, DSPs, and CPMs puts people to sleep, so it crafts case studies for its clients with measurable results that are super easy to understand.
In this vein, they released 2 this past week, which I will cover briefly because they do a good job of explaining the company’s value add.
The first comes from McDonald’s Germany, where they engaged The Trade Desk and an ad agency to launch the “McSmart Menu” for budget-conscious customers. They needed a way to raise awareness and drive sales, and using a combination of TTD’s Connected TV, TV Quality Index, and the Adbrain household graph, they achieved just that.
Basically, McDonald’s launched an ad campaign using connected TV to inspire them to visit McDonald’s and try out the new saver menu. they pre-selected popular German streaming TV publishers and leveraged The Trade Desk to buy higher-quality TV and video inventory. In addition, OMD Germany was able to connect McDonald's Germany existing store visit measurement capability with a cross-device concept. The results showed that McDonald's Germany conversion rate improved by 44% compared to when TVQI was not activated, helping to prove that CTV can be an effective channel to drive sales.
What’s more, the team discovered that CTV helped reduce the customer’s path to conversion – with 7.3% fewer impressions needed for a conversion.
By proving Connected TV has what it takes to help reach 18–39-year-olds in Germany and drive measurable sales, McDonald's Germany and OMD Germany are planning to include it in future omnichannel campaigns, another win for TTD’s technology.
Another example was Pepsico, which partnered with TTD to boost sales at Dollar General stores across the country. The company had previously executed media buying for its upper- and lower-funnel marketing strategies separately. However, they wanted to explore if taking an omnichannel approach would help improve the performance and efficiency of its brand and retail sales campaigns.
Pepsi used TTD’s DSP to run a campaign called #BetterWithPepsi program showcasing a creative “pizza is better with Pepsi” messaging.
The lower-funnel message featured a “buy 1, get 1 free” Dollar General coupon for a combo of Pepsi-Trademarked products and a popular brand of pizza that targeted potential customers at every stage of their purchasing journey. This included tapping into The Trade Desk’s marketplace of premium online video and display inventory, utilizing AI-powered optimization tool KOA, utilizing transparent reporting for manual optimizations, taking advantage of holistic frequency controls across the entire funnel, and leveraging TTD’s Player Event Retargeting feature.
PepsiCo used its first-party data and Dollar General’s syndicated retail audience data to reach its target audience via premium online video, exposing consumers to brand-focused messaging. Dollar General’s data was also used to reach more consumers via display and premium online video channels, exposing them to an ad designed to drive them to the Dollar General website to redeem a coupon. Users exposed to the brand-focused messaging were also retargeted with the sales-focused ad.
PepsiCo adopted Dollar General’s closed-loop measurement solution, along with The Trade Desk’s omnichannel reporting capabilities, to optimize and track the performance of its full-funnel strategy during and after the campaign.
Using Dollar General’s closed-loop measurement and reporting in The Trade Desk, PepsiCo found that households exposed to upper- and lower-funnel ads had a 69% higher conversion rate – defined as a purchase of a PepsiCo product – than households exposed to only upper- or lower-funnel ads.
PepsiCo also experienced a 283% higher return on ad spend ("ROAS") for its upper-funnel ads and a 208% higher ROAS for its lower-funnel ads after implementing mid-campaign optimizations.
Despite the premium cost of retail data, the Dollar General deterministic audiences drove a strong ROAS of $7.68, far outweighing the costs of non-working media.
The results proved that using a full-funnel, omnichannel approach coupled with retail data and measurement can help drive better performance and cost-efficiency than running separate brand and retail sales campaigns. PepsiCo plans to adopt this approach for future campaigns, including those with other retail partners.
We leave Pepsi with the final word. Here's Tatsuya Sakaim, Senior Director, Shopper Marketing, PepsiCo:
Working with The Trade Desk enabled us to try something we had never done before — merge our brand and retail sales campaigns seamlessly into a full-funnel, omnichannel campaign. The Trade Desk’s measurement solutions also enabled us to accurately measure the impact of this strategy. Overall, we achieved a significant boost in performance and efficiency that we hope to replicate in future campaigns.
Actually, now that I come to think of it, I will take the final word. The above are powerful examples of TTD’s open approach because the data can be freely combined with proprietary first-party data of existing clients to generate targeting and drive sales. This is a direct result of what TTD has been telling us all this time, and it’s amazing to see it in action to improve outcomes for companies that build trust with TTD in a way that walled gardens simply can’t.
In the meantime, keep growing!
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