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$74M$112M

IPO Alkami

Cloud-based digital banking platform
IPO
Medium risk

Revenues in 2019-2020

Invest in IPO Alkami

This investment idea is no longer available. New applications are not accepted

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Investment Idea Details
The Company

Alkami is a cloud-based digital banking platform. Alkami enables community, regional, and super-regional financial institutions to compete with large, technologically advanced, and well-resourced banks in the US. The company’s solution, the Alkami Platform, allows financial institutions to onboard and engage new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud based, multi-tenant architecture.

The company cultivates deep relationships with its clients through long-term, subscription based contractual arrangements, aligning its growth with its clients’ success and generating an attractive unit economic model. Target clients vary in size, generally ranging from approximately $500 million to $100 billion in assets and from approximately 10,000 to 2 million customers. Alkami has 151 customers, which had $222 billion in assets on their balance sheets at the end of 2020. Alkami was founded in 2011 in Texas, US.

Market Opportunity

The United States banking industry is massive, with $25 trillion in assets on the balance sheets of over 10,000 financial institutions. These financial institutions range from megabanks, which collectively held approximately $9 trillion, or 37% of financial institutions assets in the United States, to significantly smaller local community banks and affinity credit unions.

The United States banking industry generated over $1.1 trillion in revenues in 2019, highlighting a significant market opportunity that drives intense competition and a magnitude of economic importance which requires considerable regulation, both locally and nationally. Alkami estimates that its core addressable market opportunity has grown to approximately $6 billion today, based on 185 million estimated registered users and the revenue opportunities of the expanded features currently offered by the Alkami Platform and product set.

Risks

The company’s limited operating history makes it difficult to evaluate current business and future prospects, and its recent success may not be indicative of future results of operations.

Alkami has a history of operating losses and may not achieve or maintain profitability in the future.

Alkami faces intense competition and could lose market share to its competitors, which could adversely affect the business, financial condition and results of operations.

Financials

Alkami has raised a total of $385M in funding over 10 rounds from 9 venture capital investors, including General Atlantic and Fidelity Management.

Alkami (ALKT) plans to sell 6 million shares at a price range of $22 to $25. The company intends to raise as much as $150M in an IPO of its common stock at about $2.1B valuation. The company booked $112M in revenue in 2020. Gross margin is around 53%. The company’s revenue growth is 52% YoY.

Similar public companies are Q2 Holdings, which is trading at 14x sales with revenue growth of 26% and gross margin of 43% and Temenos AG, which is trading at 12x sales with revenue decline of -9% and gross margin of 64%. Alkami is asking investors to pay 19x sales with revenue growth of 52% and gross margin of 53%. This investment idea has a medium potential return of up to 40%.

How IPO Investments Work
1. Collection of funds

2-3 weeks before the start of the company publishes information about the opening of trading: financial statements for 3 years, a description of the company's business, plans for the future, as well as the risks that management sees in their own business. We analyze such offers and publish the best ones. Investors apply for deposits. Before the deadline for applications, you can change the request or cancel it.

Publication
09 Apr
Threshold amount
$50
2. Buy shares

We submit one large application for the purchase of shares by pre-subscription with reduced price to large investors. The application may be rejected in part or in full. Over the past three years, our applications have been rejected only three times. The next day, or every other day, we'll know at what price and at what percentage the order is executed, and we'll post it on «The my investment page».

Submit applications before
12 Apr
3. Start Bidding

The price of shares is rising from the first day due to the demand of investors deprived of the opportunity to buy shares before trading. Most of the stocks we've been recommending buying over the past three years have been starting to trade on the stock exchange at tens of percent higher than the price at which customers bought the shares. There comes a Lock up period when it is forbidden to sell shares purchased by subscription. Typically lasts 3 months.

Start Bidding
14 Apr
Return forecast
Medium (up to 40%)
4. Receiving profit

After the expiration of the Lock Up period, the investment is automatically closed and the investor receives a profit on account of the deduction commissions UT. You can always view the results of your past investments in investment archive.

End
19 Jul
Early profit fixation

Although no shares are allowed to be sold during the lock-up period, our traders seek to offer investors fixed profit by way of using various financial instruments, including forwards, options, short positions etc.

From the investor’s point of view this means that he or she may close an investment by paying a certain part of its value (as a rule, approximately 15 percent). This is due to high prices for the instruments which are employed to ensure availability of fixed profit. As such, you shall press any relevant button in the Investor Account as soon as it is active.

The closing procedure is similar to commencement of investment business. You shall file a bid which is executed within a business day by UT. So, your investment is closed at the price currently prevailing on the stock exchange. However, we rarely recommend using this feature, since upon expiry of an applicable lock-up period the average performance is higher.

Fee

FOR ENTRY

3 per cent of the share price. This fee is charged as soon as your investment bid is confirmed.

FOR EXIT

1.75 per cent of the purchase price paid for your shares as soon as trading is closed. This fee is charged upon closure of any relevant investment.

SUCCESS

20 per cent of the profit your derive. This fee is charged only if you show positive performance as of the moment any relevant investment is closed.

TO EARLY EXIT

Usually, 15 per cent (depends on the stock exchange environment). It is calculated per each investment individually.

Advantages Enjoyed by Those Investing with United Traders

RELIABILITY

Our risk managers ensure proper support throughout the entire transaction.

IN THE PROFIT FROM THE FIRST DAY

Such an approach allows it to limit extra risks related to bankruptcy of start-ups and considerably increase profit vs investors purchasing shares on open Market.

LOW ENTRY THRESHOLD

Millions of dollars are required to buy shares on a subscription basis. We have generated a pool of traders and investors which enables any newbie to participate in any transaction as aforesaid by investing just USD50 or more.

Invest in IPO Alkami

This investment idea is no longer available. New applications are not accepted

View more ideas