9 Spokes (ASX:9SP) has made major business development inroads into North America by signing a letter of intent (LOI) with Royal Bank of Canada (RBC).
Under the LOI, the company will provide RBC with a white-label version of the 9 Spokes platform.
9 Spokes builds dashboards for its clients, this means collecting all of the business’s data so it is in one place (known as the dashboard) to be analysed.
The beginning of a partnership with heavyweight RBC builds on relationships with Barclays Bank, Suncorp and Deloitte.
Mark Estall, CEO, commented: “This is our most significant business development milestone since IPO.
“The partnership has evolved quickly, since the first meeting in Toronto in February, demonstrating the agility and pace of RBC's team and a shared vision for SME customers.”
Background
The New Zealand based company listed on the ASX in June 2016 raising $25 million.
The public listing was to support expansion of 9 Spokes and boost its global profile.
9 Spokes provides its clients with a smart dashboard, which brings business data together in one place, to provide powerful insights.
A dashboard reveals the key information about performance making it easier to manage and grow.
It shows the information to management personnel allowing them to get a better overview of business operations.
How revenue is generated
9 Spokes is free to the end user and its five sources of revenue are:
- SaaS subscription model;
- Development and deployment;
- License fees;
- Subscription underwrite; and
- Benchmarking, data and analytics revenue.
As an example, a customer may buy an app for their business through the 9 Spokes platform at the recommended retail price and 9 Spokes will take a 20% margin on the purchase.
RBC partnership
The progression of the partnership with RBC (TSE:RY) has been rapid and 9 Spokes is commencing commercial negotiations and detailed workshops with RBC.
The project will evolve in stages to ensure rapid deployment.
A shorter implementation time than previous channel partners is expected, as the platform is already live and there is now a significant resource base, built up over the past 12 months.
9 Spokes expects to formalise the contract with RBC within the next three months.
Analysis
The LOI is further evidence that 9 Spokes is building its brand globally to ensure continued growth over the coming years.
It has a significant progression as it represents 9 Spokes’ first major business development milestone in the North American region.
RBC is multinational financial services company and the largest bank in Canada serving over 16 million clients and has 80,000 employees worldwide.
9 Spokes is developing a track record of attracting this calibre of client, further highlighted by Barclays Bank, the U.K.’s largest bank and one of the largest and most respected banks globally.
Furthermore, the company has been introduced to multiple banks by its two substantial global alliance partners, one of which is a world-leading computer firm, and one of which is a world-leading consulting firm.
It is these types of relationships that continue to open doors for 9 Spokes and validate both its reputation and product and service offerings.
Significantly, 9 Spokes has indicated it has been in discussions with several banks in the region including one of the largest banks in the U.S.
Both of the 9 Spokes co-founders, its CEO and COO collectively own 37% of the company, which aligns their interests directly with those of shareholders.
Furthermore, 60% of employees bought shares at the time of IPO and 45% of total shares at listing are escrowed until June 2018.