Way2VAT Ltd recorded an uptick in transaction volume and accelerated growth in the first half of 2022 thanks to new partnerships and the launch of its world-first Smart Spend Debit Mastercard.
The ASX-lister, which provides automated VAT/GST claim and return solutions in more than 40 countries, saw an 8% increase in transaction volumes to US$5.43 million by the end of June.
Although revenue was down 25% on the previous corresponding period to US$525,000, Way2VAT anticipates “a steady return to solid revenue growth” through to 2023 as foreign travel gets off the ground once more.
Since the start of 2022, Way2VAT has grown its small to medium business (SMB) client base by 21%, signed 15 new multinational enterprise customers, launched its pioneer spending card for the SMB and enterprise market and raised A$1.09 million in an oversubscribed placement.
Smart Spend “will drive strong sales in its own right”
Partnering with Railsbank (now Railsr) over the first half of 2022, Way2VAT launched the Smart Spend Debit MasterCard – the world’s first spend card for the SMB and enterprise market that fully automates VAT/GST returns from end-to-end.
Developed in consultation with customers who saw the need for such a card, Way2VAT is launching the product as demand for debit card use grows globally.
In Europe last year, cards with a debt feature increased by 42.7 million to 813.5 million, up 5.5%. What’s more, around seven in 10 cards issued in Europe now carry a debt function, because consumers like the flexibility and ease of debit payment.
Commenting on the company’s performance in the half, founder and CEO Amos Simantov said: “The launch and initial rollout of our world-first Smart Spend Debit MasterCard, built to meet customer demand for a card of this kind for the SMB and Enterprise market, fully automates VAT/GST returns from end-to-end, will drive strong sales in its own right and allows us to upsell to our existing SMB and enterprise clients."
Where does the tech come in?
Way2VAT’s Smart Spend card is built to meet client demand and allows companies to submit spend receipts and capture invoices through Way2VAT’s proprietary technology platform.
The new technology involves an end-to-end process — from capture of the receipt through to payment — that automatically analyses, reconciles, sorts and submits documentation to foreign tax authorities.
The card is being rolled out to customers in the aviation, security, automotive and technology sectors, as these industries showcase the broad range of capabilities and different uses the card can offer.
Simantov continued: “Way2VAT will earn revenue through a software-as-a-service (SaaS) model generating new annualised income streams for the company consisting of monthly charges to card users, administration licences and a percentage from each successful VAT/GST refund."
All cashed up
Thanks to its recent oversubscribed placement, Way2VAT has the cash under its belt to evolve the technology.
“With an additional A$300,000 in private placement raised in early August 2022, we accelerated the commercialisation of the Smart Spend Debit MasterCard and investment in the development of Way2VAT’s proprietary technologies,” Simantov explained.
“This will keep us at the forefront of artificial intelligence innovation that allows us to provide automated VAT/GST claims in more than 40 countries and 20 languages.”
Enterprise clients and platform partnerships
In the first half of 2022, Way2VAT also signed new deals with major multinational enterprise clients.
TikTok, Playmobil and Artsana Group are just some of the new signups bringing the company’s client base up to 215 — a 25% increase in 12 months.
These multinational clients will initially use Way2VAT’s VAT/GST claim and return solution across their employee bases in Europe, but there is scope to expand into global workforces over time.
In addition, the number of SMBs accessing Way2VAT capability through accounting software integrations increased 13% during the period, from 700 to 850.
Smart Spend grant
In June this year, Way2VAT secured a grant from the Israeli Innovation Authority, worth roughly A$625,000, to support the research and development, initial marketing and commercialisation of its Smart Spend Debit MasterCard.
Essentially, the grant will reimburse the company’s related expenses on a quarterly basis from March 2022 to February 2023.
The first instalment of the grant, valued at roughly A$221,000, arrived in July and is based on an approximate A$2.1 million research, development and marketing budget for the Smart Spend card.
What’s more, the IIA will allow Way2VAT to apply for an additional grant in 2023 based on the current approved plan.
Way2VAT plans to repay the grant from 2024 as a percentage of royalties from its future revenues. This will be generated by its own product base, which is based on the technology backed by the grant.
What else is on the calendar?
Discussing what’s on the horizon for the Way2Vat team, Simantov said: “The trend for increasing transaction volume will continue as both business and personal domestic and international travel returns to more normal levels.
“Research and development remain key, with the development of new products to meet the evolving needs of our customers.
“We look forward to the launch of a new product based on our patented automated invoice analysis technology that also incorporates the latest in AI and computer vision technology.
“This will cement our position at the forefront of the accelerating trend of companies seeking to automate and digitise their tax and compliance-related processes.
“Our recent binding share sale agreement to acquire 100% of Spanish company DevoluIVA has seen us enter the Spanish market.
“This will allow us to offer complementary domestic and foreign VAT and accounts payable services and rollout the world-first Smart Spend Debit MasterCard through an established national network and opens doors to other Latin American countries with similar VAT and accounts payable structures.”