Datable Technology Corp. (TSXV:DAC) launches partnership with LiteLink Technologies Inc.’s (CSE:LLT) subsidiary uBUCK technologies to further diversify the Company’s revenue model
SmallCapPower | May 14, 2019:
- On May 13, 2019, Datable Technology Corp. (TSXV:DAC) and uBUCK Technologies, a wholly-owned subsidiary of LiteLink Technologies Inc. (CSE:LLT), announced a strategic partnership where customers can use points earned from the PLATFORM3 loyalty program to purchase uBUCK prepaid debit and credit cards.
- Datable is diversifying its revenue streams in F2019. Datable launched Flexxi rewards, a consumer engagement platform that connects brands directly to consumers. Additionally, the Company plans to launch flexxiNVEST, an investor relations loyalty program and a loyalty platform for the eSports sector.
- Datable’s revenue model is recurring in nature with a 70% customer retention rate, which provides predictable revenues.
- The Company’s competitive advantage is the ability to gather Personally Identifiable Information (PII), which is highly sought-after information from a marketing standpoint, allowing brands to target consumers with specific advertisements.
- In our view, the stock is priced at a discount to its peers. We believe the Company can reach $4.2M in revenues in F2019. This implies an EV/Revenue multiple of 0.8x, a discount to Canadian and U.S. small and mid-cap technology companies that trade at a multiple of 1.9x.
PLATFORM3 and Flexxi rewards network announced a letter of intent (LOI) with uBUCK Technologies to enter into a strategic relationship. With the partnership, holders of a uBUCK Pay digital wallet or the uBUCK Mastercard can earn loyalty points for purchases made on either of the two platforms. Additionally, customers can redeem points generated from PLATFORM3 customer loyalty platforms to purchase prepaid credit cards offered by uBUCK. With the new partnership, Datable and uBUCK plan to split transaction fees from the convenience charges made when uBUCK cardholders use vouchers on top of their uBUCK cards. This strategic partnership has the aim of moving the Company towards a transaction-based fee structure, driving additional recurring revenues.
Diversification of revenue stream in F2019. In addition to the recently-announced LOI with uBUCKS, Datable plans to launch Flexxi Rewards Network in 2019. Flexxi leverages the technology of PLATFORM³ and is a consumer-centric model. Consumers are rewarded for their personal data and brand engagement while protecting their privacy and personally-identified information. Datable is planning on expanding its business model into new verticals, which include eSports and flexxiNVEST a shareholder loyalty program.
Datable’s revenue model is recurring in nature, providing long-term visibility. PLATFORM3 and Flexxi Rewards Network will provide a steady stream of recurring revenue, which is easily scalable. Datable is positioning itself for a successful year; the Company generated $600K of revenues in 2016, which increased to $1.4M in 2018, and in the first four months of 2019 Datable has approximately $1.4 million in contracted revenues. With contracted revenues in the first four months of 2019 equalling annual revenues of 2018, Datable has demonstrated the strength and scalability of its software as a service (SaaS) business model. Currently, 70% of Datable’s revenues are coming from return customers, which are leading global consumer brands, including Universal, who recently renewed for a third year in a row. Management’s strategy for the remainder of 2019 is to focus on advancing the Company’s customer base of leading brands and to add new sources of revenue, leveraging PLATFORM3 and its customer base. Datable is ready to launch the Flexxi Rewards Network in 2019, which will use PLATFORM3 to build-out an extensive consumer database of personally identifiable information that can be monetized by selling access to the leading consumer brands to maximize lifetime values of the consumers’ data. Consumers have an incentive to share their data and stay with Datable since they get a share of revenues each time they interact with a brand.
PLATFORM3 and Flexxi rewards help brands to engage consumers on the web, desktop, and mobile phone and to gather personally identifiable information (PII). The software’s unique value proposition compared with other marketing platforms is that it is scalable software as a service (SaaS) platform that utilizes artificial intelligence (AI) and machine learning (ML) to connect with consumers and drive additional product purchases. Additionally, the platforms’ ability to gather PII is a significant competitive advantage, as collecting permission-based consumer data is challenging and exceedingly expensive. However, PII data is a marketer’s dream, as it increases the effectiveness of targeting online advertisements and offers. As a result, PLATFORM3 provides one of the best marketing ROIs in the industry, validated by the brands that use PLATFORM3. Datable works with 20 of the largest brands globally, including Universal Pictures, 20th Century Fox, Kellogg’s, Arm & Hammer, Mars, Proctor & Gamble, Unilever, and Doritos. PLATFORM3 engages each of the brand’s consumer bases by rewarding them with loyalty points for buying products, viewing the content (such as videos), sharing content via their social media networks, completing online surveys and referring friends, all while collecting valuable information.
Datable Comparable Companies
Source: Capital IQ
Undervalued compared with peers. Datable is trading at a 2019E and 2020E forward EV/Revenue multiple of 0.8x, compared with the mean of U.S. and Canadian medium and small-cap technology companies, which trade at 2019E forward multiples of 1.9x. We believe that this gap should close once the Company announces additional contracts with leading brands, further demonstrating the success of the Company’s business model.
* Datable’s 0.8x EV/Revenues multiple was calculated based on an annualized run rate of the Company’s $1.4M in revenues for the first four months of 2019E (~$4.2M).
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