It took Amazon 9 years to turn a profit. It took Twitter 2 years to reach 1 million users.

We understand that tech companies take time to build their infrastructure and user base. Starting something new is a hefty undertaking, and investors are wise to be patient with exciting new companies that disrupt the status quo, even if it seems like a longshot at first.

So, it’s worth mentioning that Michael Siefert’s ecommerce platform, PublicSquare (sic), may very well be on its way to joining the ranks of very successful tech startups. It reached 1 million active users in only a year. It could very well turn a profit in half the time it took Amazon. Time will tell, but there are reasons for both optimism and caution as we examine the strengths, hype, and upward trajectory of PublicSquare.

What Is PublicSquare?

PublicSquare was born out of a desire to see a “parallel economy” – a marketplace that rewarded local small businesses, American-made products, and pro-family, pro-faith institutions, rather than a marketplace that rewards huge multinational corporations with harsh working conditions overseas that give money to abortion providers and radical LGBTQ+ initiatives for children. The idea is to connect consumers with conservative, grassroots values with sellers who share (and exemplify) those values.

“We’re actually trying to shift who wins in our economy,” says CEO Michael Siefert. “This is a long game. The left understands that, by the way. They know it’s a long game, and they’ve been planning for this for thirty, forty years. We have to have the same mentality… I’m doing this for my daughter.”

PublicSquare has an Amazon or Etsy-like UI that allows people to search for products they’d like to buy (from over 75,000 businesses), an easy check-out system, and it’s free for both consumers and businesses to use. PublicSquare vets each business that applies to be part of their ecosystem according to 5 key values:

• Pro-Life and Pro-Family
• Pro-Freedom and Truth
• Pro-America
• Pro-Constitution
• Pro-Small Business

They make their money by selling in-site advertising space to sellers who want their products to rank at the top of a given search, though they may pursue other monetization strategies in the future as well. PublicSquare does not harvest or sell user data, and is committed to being a place that is just for buying and selling the things people want and need – no lectures, no weirdness, no guilt.

“When consumers come to the parallel economy,” Siefert says, “[they know] that they’re not going to be lectured about gender ideology when they’re just trying to buy a pair of pants.”

How It’s Going – Diving Into the Financials

PublicSquare released its Q1 financials on Wednesday of last week, and there’s a lot going on.

“The first quarter 2024 was yet another monumental quarter for PublicSquare with net revenue increasing 9.2x and cash flow and operating expenses only rising 2.2x compared to first quarter 2023,” their CEO reports.

Users are increasing, brand engagement is up, and revenue is way up. At a glance, the Q1 financial statements look… strange. But that’s because PublicSquare acquired BNPL provider Credova in an all-equity deal that greatly altered PublicSquare’s balance sheet. Credova, a $15 million company (which was profitable last year), provides a leg up to PublicSquare, as it is the only BNPL platform in the country that services gun purchases. Credova’s CEO, Dusty Wunderlich, said that the acquisition demonstrated “our collective dedication to building financial infrastructure that upholds our values and protects our community.”

PublicSquare estimates its year-end exit run-rate revenue at around $50 million for 2024 – not a bad upgrade from $5.6 million in net revenue for 2023 – which wasn’t a bad upgrade from $475k in net revenue for 2022.

PublicSquare is moving fast. The 10x is real.

PSQ Holdings, as they are known on the NYSE, currently operates four subsidiaries: PublicSquare (the online shopping platform), EveryLife Inc. (a pro-life diaper brand), Credova (BNPL services), and PSQLink (a set of B2B growth tools).

That’s the good news. Here are some of the challenges:

PublicSquare is currently at a $15 million operating loss, though as of August last year, the company reported that it was on track to turn a profit in 2024. If they are able to continue increasing revenue and user base while controlling rising expenses, they might just be able to do it. But, as with all projections, that is an “if,” not a certainty. In Q1 2024, PublicSquare’s net revenues of $3.47 million were offset by total costs and expenses of over $18 million – but that may well be frontloaded, so time will tell. For the moment, they have less than $10 million in cash, a heavy liability load, and a lot of big expenses in the near future. I’m not sure how Q1, with $3 million in revenue, gets forecasted as $50 million by year’s end unless they are heavily banking on jaw-dropping growth.

PSQH does not look like a smashing success according to its current stock price on the NYSE – After an IPO where the ticker debuted at around $10 last year before briefly rising to $14, the share price has been on a steady downward slide since then, currently sitting at under $4/share. It is still early for the young company, however, and according to one source, PSQH is a “strong buy” recommendation, forecasted at $7.5 for 12 months (though to be fair, the put/call ratio has recently passed neutral and currently stands at 1.17, which implies investor bearishness).

Some critics accuse the company of offering misleading statistics about their real user base, and claim that rather than an alternative to Amazon, PublicSquare faces the same set of challenges that killed Groupon. Advocates, however, say PublicSquare is a real and viable alternative marketplace, and a “revolution” that will show the triumph of American values over corporate excess.

It’s a David and Goliath story – but as we all know, sometimes the little guy can pull off the win. While we’re certainly rooting for Public Square, at the end of the day, it won’t be about who we would like to see succeed; it will be about how well PublicSquare can meet a real felt need in the marketplace, sustainably, for years to come.

TL;DR

PublicSquare is employing an aggressive, fast-growth strategy to reach a sustainable economy of scale in the online shopping space. It is still early, the future is full of very real risks, and the outcome is not yet certain, but there are some reasons to be hopeful for this fledgling tech company seeking to solve a very real problem for millions of American consumers who just want to shop in peace, guilt-free.

“While we’re not an explicitly Christian company,” Siefert says, “we are a company that is also unashamed about why we’re doing what we’re doing. I wake up every morning in prayer and have to go to bed every night in prayer because this whole thing is dependent on God.”

Sent to Win is for entertainment purposes only, and this article does not constitute financial advice. For investment tips and financial planning, please visit a certified investment broker or financial planner.

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