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Cardlytics ($CDLX): Value of "Venmo Offers" Could Equal Entire CDLX Market Cap

Following the discussions around the future potential of Venmo Offers (powered by Dosh), here are possible scenarios where Venmo Offers could be worth the entire current market cap of $CDLX.

For all my notes on CDLX, check out my Qualitative and Quantitative “Research Notes”:

This was first published on Substack and discussed on YouTube on 6.15.2021. Republishing on my website as a backup.


In a recent thread on twitter and in the following YouTube video, I shared my thoughts on the possible future state of Venmo Offers, following the Cardlytics investor day (I will be posting my notes and thoughts on the investor day presentation here on Substack later this week).

From the Cardlytics investor day presentation:

“Our continued focus on growing our Venmo partnership…the team is focused on expanding rewards to additional payment types, creating a rewarding experience with Venmo, regardless of what payment instrument the consumer uses…We will also continue to invest along with product in our teams, supporting the build and partner integrations for enhancements, including currency conversion, pay with QR code currently live at Venmo.” - Farrell Hudzik, Executive Vice President, Financial Institutions, Cardlytics Investor Day Presentation

The biggest thing I realized from this statement, is Venmo MAUs for Cardlytics has the potential to increase substantially compared to what was previously assumed.

Out of curiosity, I wanted to see what Venmo Offers would be valued at under a couple of possible scenarios. One way to view the first valuation, is essentially a reverse discounted cash flow valuation, where the current assumptions explain the current CDLX market cap. The second valuation is adjusting assumptions to what is possible, and still realistic.

This exercise is nice to do, because as more information comes out around Venmo, and if these assumptions start materializing without any adjustment to the $CDLX market cap, the margin of safety on this investment increases substantially. In essence, if the current market cap of approximately $3.5B can be explained by just Venmo Offers, not even all of Dosh, and excluding the current Cardlytics platform + integration with Bridg + international expansion with open banking, then this could become an even more interesting investment proposition.


In attempt to value Venmo Offers as a standalone piece of Cardlytics, I first started with attempting to figure out how many monthly active users should be included.

Originally, I assumed MAUs from Venmo would be limited to users who had to get a Venmo debit card (or possibly credit card). This would be a very limited number. I am not confident we would even see 1M users. However, if now the focus is building out the capability of CDLX offers working on any payment instrument, then offers could be available for all 60M+ Venmo users. This would dramatically increase the MAU potential with Venmo.

There are currently over 60M current Venmo users. This is based on Venmo’s website. We will assume a small growth in Venmo users of 5% per year, despite that as younger demographic becomes of an age to start banking, more users will likely be added on at a higher rate, and at an increasing proportion in relation to the past (i.e., more likely to use Venmo than current older generations).

Cardlytics ($CDLX): Value of "Venmo Offers" Could Equal Entire CDLX Market Cap

Source: Venmo Website

We cannot assume all 60M will be considered an MAU. There is obviously some double counting of Venmo users who also have Chase, Wells Fargo, etc. used as their linked account. However, there is likely a high percentage of the 60M+ users who use other cards and banks, like credit unions. I have one debit card and one bank linked, and both banks are not covered by CDLX. Therefore, for now, I assume an arbitrary 25% will be considered an MAU. This could be rationalized as 50% have a card or account currently covered by Cardlytics and of the remaining, only 50% will use Venmo to make purchases, for a total of 25% (50% x 50%). Later, we will value under just 10%.

In terms of consumer incentives (CI), one easy assumption is assuming one $10 offer is redeemed per month at 10%, or $12 in one year. This may end being extremely low, as travel is added to Venmo offers and SMB offers increase attractiveness and utilization.

The $12 in CI could be rationalized as an MAU using one offer per month, such as going out to eat at Chipotle. To put this in perspective, I have actually received a 10% Chipotle offer, and used over $12 in consumer incentives in the last 90 days (food and coffee purchases includes orders for myself and my wife, so at $21.39 CI, that is closer $10.70 / person + $3.21 from Kindle = $13.9 in CI for myself in last 90 days - not one year).

Cardlytics ($CDLX): Value of "Venmo Offers" Could Equal Entire CDLX Market Cap

Source: My redeemed offers in last 90 days, including 10% at Chipotle.

To convert CI into revenue, this can be based on the last few 10-Ks, leading to about $2 in revenue per consumer incentive redeemed. This number could be lower depending on how CPR and CPS are reflected in 10-K. For more information on this discussion, see this past write-up and YouTube video, where it is explained in more detail.

Current CDLX gross margins are around 36%. Based on the following CDLX comment on investor day, I assumed higher gross margins of 50%, based on assuming lower revenue share with the neobanks.

“The ARPU opportunity at neobanks is actually greater, because the neobanks, this is their core loyalty program and they are not nearly as focused on the revenue, because they laser focused on growing their base, and see this as an engagement opportunity” - Farrell Hudzik, Executive Vice President, Financial Institutions, Cardlytics Investor Day Presentation

To get operating expenses, I will base it on CDLX 2020 operating expenses of $117M, but scaled for 100 employees at Dosh vs 400 at CDLX (both are estimates based on what I could find online).

Taxes will assume a 21% corporate tax rate, and additional taxes for both state and for future increases, for a total of 30%.

If we assume a 20x CF multiple, it would be a multiple that is lower than comparable companies. If we put 20x CF multiple in relation to the present value of future cash flows, it could be explained by a 5% risk free rate + 3% equity risk premium - 3% growth (( 1 /( 5% + 3% - 3% )) = 1 / 5% = 20.

Valuation 1

Therefore, if you add this altogether:

60M Venmo Users

x 25% Using Offers

x 5% growth per year for 10 years

=24.43M MAUs

x $12 Consumer Incentive Redeemed

x $2 Revenue / Consumer Incentive

x 50% Gross Profit Margin

- $29.25M Dosh Operating Expense

x 70% for Taxes (30% Tax Rate)

x 20 CF Multiple

= $3.695B value for Venmo Offers

For more accuracy, we should then discount this back from time 10 to today, which would decrease this figure slightly. However, as we will in the next valuation, our value at time 10 will be higher, and even after discounting back to today, the value would still exceed the current market cap.

Currently, Cardlytics market cap is approximately $3.5B. Therefore, under this hypothetical scenario, Venmo Offers, ignoring the rest of Dosh, could be alone valued at the current entire Cardlytics market cap.

As we gain more information and see future developments around Venmo Offers, this valuation can be significantly updated, with more accurate assumptions.

Although the 25% of 60M Venmo users to get MAUs may be way too optimistic, $24 in ARPU, 50% gross profit margins, and 20x CF multiple may all actually end up being too low. Therefore, in the next section we will see what is possible if we adjust these assumptions.

Valuation 2

Instead of 25% of the Venmo base being counted as MAUs, lets assume a smaller portion, such as 10%.

We will assume Venmo’s user base grows by the same 5% per year over the next 10 years.

For consumer incentives, we will assume that redemptions occur 2 times per month, assuming more offers come onto Venmo from SMBs. Specifically, this may be able to occur from Venmo business accounts. It is uncertain what is possible with Venmo business accounts, but if the capability is added where business profiles can easily use the self service platform on Venmo, we could see many SMBs using this feature at a much higher rate, increasing the offers available and the probably of a user having an attractive offer that they would like to redeem. In addition, this would solve the previously mentioned issue of how to make online purchases with the QR code. Therefore, we will assume twice as many redemptions, for a total of $24 CI per year.

Cardlytics ($CDLX): Value of "Venmo Offers" Could Equal Entire CDLX Market Cap

Source: My Venmo App

We originally assumed 50% gross margins, which is only slightly improved over the current approximate 36% that CDLX earns. Therefore, if neobanks are allowing for less revenue share than I believe given their focus on engagement and growth, rather than revenue, then 60% gross profit margins on this part of the business isn’t unreasonable.

In addition, to be more reasonably comparable to other CF multiples seen in related mature companies, we will assume 33.33x CF. Or using present value of future cash flows, and how others may value the business, 5% future risk free rate, 3% equity risk premium (when the company is mature) and 5% growth rate, for a total discount of 3%, or 1 / 3% = 33.33x cash flow.

All together:

60M Venmo Users

x 10% Using Offers

x 5% growth per year for 10 years

=9.77M MAUs

x $24 Consumer Incentive Redeemed

x $2 Revenue / Consumer Incentive

x 60% Gross Profit Margin

- $29.25M Dosh Operating Expense

x 70% for Taxes (30% Tax Rate)

x 33.33 CF Multiple

= $5.885B value for Venmo Offers


This is very subjective, and way too early to tell what is possible with Venmo, if anything. However, it is something worth following closely over time.

More Detail

I discussed Venmo Offers and these valuations with additional detail in the following video:


If you have any questions or push back on any of the above, please contact me. I would enjoy discussing more.

-Austin Swanson (Swany407)

Twitter: @Swany407

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis. Please see the Disclaimer page for more details.

Thoughts Following Price Decline

Explaining the Investment

If you are looking for more detail on this company and the investment thesis, I have created a write-up, which is free to read via Substack. The write-up is formatted in bullets to more quickly skim and read sections of interest.

I also discussed the investment on YouTube.

Additional Resources and Links


  1. Cardlytics Investor Day:

  2. Venmo:

  3. Cardlytics Website:

  4. Dosh Website:

  5. 2020 10-K:


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