Shares in mobile commerce transactions software provider MoPowered went to a discount on the first day’s trading.
MoPowered raised £3.64m at 100p a share, which valued the company at £15.8m. Dealings commenced on 18 December and at one point the share price reached 105p but it closed at 97.5p. Existing shareholders raised £360,000. The flotation cost around £700,000 leaving MoPowered with around £2.9m net.
MoPowered has developed its base technology and it needs to sell it to retailers. Mobile commerce is a fast-growing market and MoPowered enables smaller retailers to take advantage of this. The focus is smartphones and tablets. The flotation will be used to finance further development and marketing expertise. The cash will also cover continuing losses.
A Software-as-a-Services (SaaS) platform was developed and launched in March 2012. MoPowered has a strong position in the mid-tier retail sector and it can offer individual mobile sites for retailers. The company has referral agreements with the likes of PayPal and DataCash. There are 120 contracted clients and its technology has handled more than 1m transactions this year.
The revenue model is a one-off set-up fee, a monthly fee for hosting and support and a monthly fee based on the value of sales processed – generally between 1% and 2.5% of monthly sales. Contracts are initially for 24 months with 12 month rolling extensions. The Isle of Man call centre also generates revenues.
Revenues rose from £484,000 in 2011 to £761,000 in 2012 and a jump in admin expenses led to losses rising from £1.83m to £2.7m. Interim revenues improved from £373,000 to £544,000, while the interim loss increased from £1.19m to £1.41m.
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