The Australian: Royal Bank of Canada deal for 9 Spokes
9 Spokes, the ASX-listed cloud app integrator, has scored its first big win in the North American market with the Royal Bank of Canada geared up to use a white-label version of the company’s platform.
9 Spokes co-founder and CEO Mark Estall said the RBC deal was likely to open the door to further partnerships in the lucrative market.
With a letter of intent signed, 9 Spokes has started commercial negotiations with the bank and expects to formalise the contract within the next three months.
According to the company, it is in active talks with several other large banks, including a major US financial institution.
Mr Estall told The Australian that the speed at which the RBC arrangement had come in place was not only a validation of 9 Spokes’s technology but also the bank’s commitment to innovation.
“We started the conversation in February and things have travelled very quickly since then, mainly because there was buy-in from senior executives,” he said.
“That’s always been one of the things we look for and in a way we do as much due diligence on them as they do on us.”
It is the first big score for the New Zealand-based company since its listing in June last year and comes with its share price stuck in the doldrums. It listed at 20c last June but has been trading between 14c and 16c for the past three months.
The company posted full-year revenue of $NZ1.2 million ($1.1m) for the year to March 31, up from $NZ710,000 a year earlier.
Net loss for the period came in at $NZ14.1m, up from $NZ5.4m.
Mr Estall maintains that 9 Spokes did not list too early and that being a listed entity worked in its favour when it came to winning business.
“The reason RBC only took six months was because we were a publicly listed company and it’s saving us a lot of time in the sales process,” he said.
“We did set ourselves to be a publicly listed business from day one. We hired PwC to audit our account and we approached a publicly listed-oriented group of directors to sit on our board.
“We always said we were going to get into the North American market and we haven’t deviated from our original strategy one millimetre.
“We are getting the traction we need and I think it’s all going to play out.”
Supratim Adhikari
9SP Price at posting:
15.0¢ Sentiment: None Disclosure: Not Held
