We made it! Well, almost. Before the year comes to an end, there’s a few pieces of business to attend to — including the latest stocks we’ve added to our portfolios.
We’ve bought Affirm for both our Spaceship Universe Portfolio and Spaceship Earth Portfolio, and Twilio and Thermo Fisher Scientific for our Spaceship Earth Portfolio.
Let’s take a look.
Bought: Affirm
In the Spaceship Universe Portfolio and Spaceship Earth Portfolio
Affirm is a buy now, pay later company based out of America.
Affirm was founded by Max Levchin, who is perhaps best known for co-founding the company that eventually became PayPal by merging with Elon Musk’s X.com.
Affirm isn’t your typical ‘pay in four’ BNPL provider. Customers can make monthly payments, and can choose a time period that suits their lifestyle (up to 48 months). Customers can also pay interest — it ranges from 0% to 30% pa — depending on credit and eligibility.
Customers can also use the Affirm app to manage their payments, open a high-yield savings account, and access a personalised shopping marketplace.
We like Affirm for a few reasons. Firstly, we see Affirm capitalising on the growing shift away from credit cards and into BNPL payments. And we think the company has a chance to increase its transaction frequency even further with the launch of its new debit card, which allows customers to split payments into installments within 24 hours of the transaction.
Also, Affirm has signed exclusive contracts with big name ecommerce companies such as Shopify and Amazon, making it the exclusive BNPL provider for those brands.
Finally, the BNPL trend is still in its early stages in the US, with just 2% of ecommerce using BNPL services as opposed to 10% in Australia (as of 2020).
There are some risks, such as Affirm’s lack of late fees, but we believe this is offset by the underwriting and securitisation of the product.
We also added Affirm to our Spaceship Earth Portfolio as we believe it contributes to Goal 10 (Reduced Inequalities) of the UN Sustainable Development Goals agenda.
Affirm is offering a credit card alternative that’s transparent and doesn’t charge late fees, which we believe could help to improve lives by reducing credit card debt in America.
Bought: Twilio
In the Spaceship Earth Portfolio
Twilio is in the business of communication.
Long story short, it helps businesses use technology to have conversations with their customers. It provides them with a cloud-based communications platform that can mix and match phone, VoIP, email and messaging solutions depending on their needs.
Massive companies such as Stripe and Deliveroo use Twilio.
We believe Twilio contributes to Goal 10 (Reduced Inequalities) of the UN Sustainable Development Goals agenda.
The company gives 1% of its equity to Twilio.org, which supports non-profits and social enterprises. For example, it pledged $10 million to Gavi, the vaccine alliance, in support of COVAX, a global initiative to vaccinate lower-income countries against COVID-19.
We see Twilio as becoming a one-stop shop for marketing and communications. It acquired email provider SendGrid in 2019 and customer data platform Segment in 2020, both of which we use at Spaceship. Twilio can gain and provide visibility of the end-to-end conversation process for businesses, which should be super valuable. It’s expecting 30% organic revenue growth in the four years following December 2020.
Messaging is still mostly one way, but we believe Twilio has an opportunity to improve customer engagement with two way messaging and conversations between companies and customers.
Twilio has lower gross margins than most technology companies do due to messaging costs, but we think this should be offset by the increasing potential it has to use customer data to improve customer interactions.
Bought: Thermo Fisher Scientific
In the Spaceship Earth Portfolio
Thermo Fisher Scientific is a world leader in ‘serving science,’ which it does by providing key instruments, reagents, and consumables used in biological and medical research.
We believe Thermo Fisher Scientific contributes to Goal 3 (Good Health and Well-Being) of the UN Sustainable Development Goals agenda.
The company’s mission is to make the world healthier, cleaner and safer. The company has played a key role in fighting COVID-19 in low and middle income countries by partnering with policy makers and experts to deliver a more equitable distribution of tests and vaccines.
We like Thermo Fisher Scientific because aging populations, advances in life sciences research, and medicine in frontier areas such as genomics are all trends that we believe will likely help power the continued growth of the company.
There is, of course, risk; the company saw an increase in revenue due to the impacts of the pandemic, but CEO Marc Casper has said he feels that declines in COVID-19-related revenue may be offset by regular business being regained as and when the world shifts out of the pandemic.
Spaceship Origin Portfolio
For customers in the Spaceship Origin Portfolio, things are a little different.
The Spaceship Origin Portfolio is made up of around 100 of some of the largest ASX listed companies by market capitalisation, and around 100 of some of the largest global companies by market capitalisation.
If a company moves in or out of the Spaceship Origin Portfolio, it will be because its market capitalisation has changed, not because we have made the decision to buy or sell it.
Sold
We have sold some stocks, which we’ll be reporting on in the new year.
We’ve sold Poshmark from our Spaceship Earth Portfolio, we’ve sold Softbank, Berkshire Hathaway, and Zillow Group from our Spaceship Universe Portfolio, and we’ve sold Schrodinger from both the Spaceship Earth Portfolio and Spaceship Universe Portfolio.
The Spaceship Universe Portfolio invests in Affirm at the time of writing.
The Spaceship Earth Portfolio invests in Affirm, Twilio, and Thermo Fisher Scientific at the time of writing.
The Spaceship Origin Portfolio invests in Berkshire Hathaway, Softbank, and Thermo Fisher Scientific at the time of writing.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
