Baron Funds, an asset management firm, published its “Baron FinTech Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 2.53% was delivered by the fund’s institutional shares for the fourth quarter of 2021, compared to its benchmarks, the S&P 500 Index, which appreciated 11.03%, and the FactSet Global FinTech Index which rose 7.68% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Baron FinTech Fund, in its Q4 2021 investor letter, mentioned Expensify, Inc. (NASDAQ:EXFY) and discussed its stance on the firm. Founded in 2008, Expensify, Inc. (NASDAQ:EXFY) is a Portland, Oregon-based expense management system developer with a $1.5 billion market capitalization, and is currently spearheaded by its CEO, David Barrett. Expensify, Inc. (NASDAQ:EXFY) delivered a -38.24% and it closed at $16.75 per share on March 15, 2022.
Here is what Baron FinTech Fund has to say about Expensify, Inc. (NASDAQ:EXFY) in its Q4 2021 investor letter:
“During the quarter, we participated in the IPO of Expensify, Inc., a provider of expense management software primarily for small- and mid-sized businesses. Expensify enables individuals and companies to track expenses, pay bills, generate invoices, collect payments, plan trips, and manage company credit cards in a single application. The company operates in a large market with an estimated U.S. revenue opportunity of $16 billion. Small- and mid-sized businesses are difficult to reach, so they tend to be underserved by competitors who generally focus on larger enterprises. Expensify employs an efficient go-to-market approach with a freemium product offering that is driven by bottom-up employee adoption rather than outbound sales efforts. This enables Expensify to profitably serve an attractive market segment with better monetization potential and lower selling costs. Relative to the competition, Expensify has a difficult-to-replicate platform due to the combination of a blockchain database infrastructure, network effects as more businesses and individuals adopt the product, and a proprietary Al-based customer service model. Expensify is classified within the “Challenger” category.
We believe Expensify will grow revenue 25% to 30% for many years through a combination of new users, increasing usage from existing customers, greater adoption of newer products (such as Expensify Card), and international expansion. The company already has an attractive margin profile due in part to its efficient go-to-market approach and should comfortably operate at 30%-plus EBITDA margins over time. We believe that Expensify will be a strong earnings compounder, which should drive solid returns for the stock over a multi-year period.”
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Our calculations show that Expensify, Inc. (NASDAQ:EXFY) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Expensify, Inc. (NASDAQ:EXFY) was in 18 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 0 funds in the previous quarter. Expensify, Inc. (NASDAQ:EXFY) delivered a -53.12% return in the past 3 months. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.