Elixir: A Fintech Banking Solution for Millennials
(8 pages of text)
In 2016, Elixir, a financial technology start-up, was developing a social banking application to provide mobile banking to young adults and other underserved banking customers. Elixir had a social finance business model called MillennialMoney, where existing customers had an opportunity to earn referral fees by introducing new customers. For the banks, Elixir provided a novel marketing solution to attract millennial customers. As a technology company in the social finance space, Elixir could use the strategic and operational advice of an experienced banker to help turn this vision into a reality. One such banker had been in discussions with Elixir’s chief executive officer and the chair of the advisory board. The banker had been conducting due diligence of the company all summer of 2016 and had even gone on sales calls in Malaysia to see what banks thought about Elixir. Now it was time to make a decision. Should he join the management team of Elixir and invest in the start-up?
The case is suitable for an undergraduate or a graduate-level course on entrepreneurship, fintech, banking, or alternative investing. The case provides students with an opportunity to learn about the world of fintech start-ups, which are targeting underserved customer segments using digital offerings. The case focuses on mobile banking and international remittances, which are transfers from an individual in a foreign country to family and friends in a home country. The case is also suitable to illustrate how to evaluate a new and innovative business model that is being introduced into a mature industry. It introduces the concepts of strategy, innovation, and disruption. After completion of this case, students will be able to
- learn about fintech, social finance, and banking opportunities in emerging markets;
- examine a new business model and evaluate the size of the market opportunity;
- understand how an experienced banker conducts due diligence on a technology start-up; and
- learn about funding and valuing a start-up, and calculating the equity dilution of ownership stakes.
Finance and Insurance
Hong Kong, Small, 2016
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