Spenda, has successfully wrapped up the final phase of the DSD initiative's Foundation Stage. This announcement further solidifies the trajectory this business is on right now, and validates its technology. Here is my take on this announcement!
In a testament to the success of the initiative, Spenda and Capricorn are now in advanced discussions to finalize a 10-year service agreement for a commercial launch scheduled in mid-2024. Capricorn, with a vast network of over 26,000 Members and 2,000 preferred Suppliers across Australia and New Zealand, plays a pivotal role in the automotive sector. This is what we have been waiting for since 2021!
Thanks to Spenda's cutting-edge solutions (and the entire team at Spenda), all Capricorn Members will soon have access to eCommerce payment solutions, powered by Spenda, enhancing their overall experience. Spenda's Pay-Statement-by-Link and Payment Widget solutions will be integrated into the upgraded payments infrastructure. The Pay-Statement-by-Link technology will allow Members to view live statements, integrate purchases into their financials, and enable preferred Suppliers to process credits. On the other hand, the Payment Widget will facilitate charging Member purchases to the Capricorn Trade Account via preferred Supplier eCommerce solutions.
This positive development follows Spenda's earlier announcement in May 2023, stating its selection as Capricorn's preferred supplier for the initial phase of the DSD initiative. The success of the foundational phase, announced on 31 August 2023, paved the way for negotiations to extend the engagement.
In October 2023, Spenda embarked on an 8-week contract to complete the final phase, which involved a security and platform Proof of Concept (‘PoC’), successfully simulating the entire production solution. In recognition of Spenda's achievements, Capricorn has accepted the completion of the final phase, marking a crucial milestone in their partnership.
Now, both parties are actively working towards finalizing the 10-year service agreement for a commercial launch in the second half of the financial year 2024. As a cherry on top, Spenda will receive $443k for the successful completion of the final phase, along with $1.3m in initial development fees for the commercial launch in 2H FY24.
Additionally, Spenda will enjoy a recurring revenue stream of $100k per month in software licensing fees. To add to the positivity, the agreement includes a 5+5 year option, potentially extending the partnership to an impressive 20-year term if exercised. This marks a momentous step forward for Spenda and its ongoing success in the software and electronic solutions space.
If this technology has been endorsed by the likes of Carpet Court and now Capricorn, whats next? Great achievement and a huge congratulations to the entire Spenda team!
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