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Octobers Very Own - Flamingo/CR8, page-5

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forrestfield

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26/09/16

14:13

Post #: 19423082
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Originally posted by 952i ↑

With Re-listing in under 3weeks here's everything one might want to know about this acquisition ill dump my FA document here.
Might take a while to absorb and read it all.

Firstly special thanks to both @TraderGT and @forrestfield who have provided some great research on these threads. Alot of which I worked off to help me to find new things about CR8.

1. Capital Structure

595,440,046 Shares on issue post acquisition (Prospectus Page 7) – This excludes performance shares and options.

@4.0c :
Market Capitalization: $23,817,602

Cash: $5,228,375 (Prospectus Page 93) – Excluding Loan from Meerkat (Prospectus Page 49) which I assume is the Insurance company “Comparethemeerkat.com.au” So they’re likely to be involved in the future if I’m correct about this announcement

EV: $18,589,227

(Prospectus Page 48) – A reminder we also have 100% of Agenda Technologies.

2. Management

Founder/CEO:
Dr Catriona Wallace – https://www.linkedin.com.au/in/drcatrionawallace

Key note Speaker at SugarCon (Top CRM conference)

Finalist Advance Global Australia Award

Telstra Business Women of the Year Finalist

Nominee Ernst and Young Entrepreneur

James Ruse(NSW number 1 Ranked HS) Graduate

Inducted into Australia Business Women Hall of Fame

4 Startups including “Fifth Quadrant” which runs successfully today and is partly what Flamingo does with CXS (Customer Experience Strategy)

3 NPO’s including “out & up” providing employment for female prisoners, refugees, asylum seekers

Pearcey Foundation Tech Award Winner

Telstra NSW Medium Business of the Year Winner

PhD Organizational Behaviour AGSM

Chair Member:
Cathie Reid – cathiereid.com

Founder of Epic Group including Epic Pharmacy one of Australias Largest Pharmacy service providers

Epic Group now focusing onto technology Sector

Founder of DoseAid and Icon Cancer Care (now part of Icon Group)

Inducted Australian Business Womens Hall of Fame

Top 100 Women of Influence (AFR)

Telstra Business Women of the Year Winner

Monash University Alumni Achievement Award

Original Google Glass explorer program

Virgin Galactic Astronaut

Endless Media Features (Microsoft, ABC, Pharmacy News, Fortune, Telehealth, AFR…)

Chief Technology Officer:
Joe Waller – https://au.linkedin.com/in/mrjoewaller

Founder of Mintsprint

Chief of Staff/technology strategist at Betfair

Key Role in starting up Betfair into U.K’s largest betting exchange

CTO corporaterealestate.com

Developer at IBM/EA

Chair Member:
Paul Hunyor – https://au.linkedin.com/in/paulhunyor

Harvard Business School Graduate

Served on boards of Companies which have grown valuations of over $0.5Billion

Investment Partner at Breakthrough Labs Venture Capitalists

Consultant Manger at Bain & Co

Director at Rebel, OneBigSwitch, MaxSparrow

Lachlan Harris(Kevin Rudds Advisor – Schoolmate of Paul) introduced Paul Hunyor to Kevin Rudd which they started up OneBigSwitch to take on Banks to lower interest rates for mortgages

Backing of Murdochs

Advisor/Board Member:
Doc Searls – https://en.wikipedia.org/wiki/Doc_Searls or https://linkedin.com/in/docsearls

Harvard Graduate

Linux Journal Publisher

Co-founded Hodskins Simone & Searls which became the top high-tech advertising agency in North Carolina and Silicon Valley

Multiple Media Publications

Author of The Cluetrain Manifesto – Best business seller award, published in 9languages

3. The Company

AI(Artificial Intelligence) IA(Intelligent Assistant) CXS(Customer Experience Service) SaaS(Software as a Service).
AIIACXSSAAS.
A low cost platform (for phone and computer) that encompasses Artificial Intelligence for financial service companies to provide customers with a journey in automation and interaction to consume the financial product. Then statistically displays on cloud how to optimize sales or product conversion rates. Uniquely combines both human and artificial intelligence interaction.

(Prospectus Page 40-43)

Although Flamingo has an established product platform ready for use, facets yet to be developed: Which can come into the news-flow once we relist. (Prospectus Page 46)

(ii) Refers to easy conversion from automation to human as shown here:

(Prospectus Page 40)

Flamingo Awarded:

Cool Vendor of the year

NSW Tech Entrepreneurs Award

CIO – Most promising CRM Solution Provider

Number 2 Startup to watch at CeBIT

Stage (ii) of development is expected to be completed in October as per what was heard in investor roadshow. This will allow full automation and interchanging between Human to AI modes.

3. Partnerships (Where it gets exciting)

I wanted to put this under “3. Company” but believe this needs a section of its own since there is so much in the pipeline.

Some other interesting notes and price catalysts:

Attempting to sign up company larger than Nationwide as per roadshow (Fortune50) – see “Partnerships”

Partnership with world’s largest CRM vendors – see “Partnerships”

Aggressive product development

Expanding there already top tier management with a COO

10 Proposals/Sales Pipelines established with F500’s

Flamingo Mentality:
Global from day one, as seen in this interview -

What differentiates Flamingo to other RTO’s is they are “global from day one”. In the interview Catriona explains how most ASX RTO’s like doing their own little backtesting in their backyards.
Flamingo plans on starting big and only getting bigger explaining how U.S fund managers are far more open to rapid expansion and fast tracking growth. Having clients in the pipeline from day one internationally rather just small clients in Australia to backtest.
This doesn’t mean they havent backtested, they have spent the last two years having great success in their own “backyard” and in U.S and was approached by CR8 to list on ASX once this testing was done (usually I’ve noticed it’s the vendor that approaches the shell to list mid-testing – so Flamingo is two steps ahead in this case).

“We have achieved more in the U.S in less than a month than what it has been able to achieve in Australia in the past nine”

From 2014:
So AFR has been stalking the Flamingo Journey since its birth even before ASX discussion.
So it began with Partnerships with Oracle (World’s largest CRM Saas).
(http://www.copyright link/leadershi...ches-software-startup-flamingo-20140327-jybcb)
Potential partnerships with Israel, when Catriona went on her trip to Israel for a trade delegation she realized Israel has taken $2B in venture capitalist investments compared to $124M for U.S. Israel’s next big area of investment is personalized healthcare which is a sector Flamingo wants to reach into hence Cathie Reids involvement with her founding of “Epic Group” and working with “Icon Group” both heavily involved in Health.
Wallace and Reid both developed strong relationships with Professors and technology firms exploring potential partnerships, they are also looking to set a development team there in the future to add on to their offices in Sydney and New York.
(http://www.copyright link/leadershi...-entrepreneur-catriona-wallace-20140725-jybuo)

2015:
After moving to U.S

Partnership with Clarion Group (Prospectus Page 36)

Clarion group is a fairly large organization that assists to grow companies via complex strategic direction on a very high level. They have a very large client base and look to improve customer experience for their clients. (http://www.theclariongroup.com/index.php/clients) They even have the only two American clients as Flamingo (Nationwide, Daily Gazette). This leads me to think Clarion Group could be providing more American clients for Flamingo to grow Flamingos own business in the future.
Now the part that gets me most excited is Clarion has likely introduced Flamingo to a bunch of Fortune 500’s.
How good does it get?

Sales pipeline established with a number of Fortune 250 organizations. (Prospectus Page 36)

Just finding some F500’s in Clarion’s clientele base which also may be potentially forwarded or pursued by Flamingo: Mastercard, American Express, Visa, Citizens Financial Group, Pfizer (since Cathie has links with them and Catriona said shes interested in expanding to healthcare after her visit to Israel), Liberty Mutual Insurance, Massachusetts Insurance, Cisco, IBM, Microsoft.
Current:
As of now we know clients are

Nationwide: $43Billion in sales, Fortune100 Company, Insurance products

NAB: Has been a client since 2014 and trying to fast-track the startup procedure

The Village: A NAB community assisting startups to market themselves http://www.nabvillage.com.au

Prime Financial: http://www.primefinancial.com.au , ASXFG which had a recent 20% run in July

The Daily Gazette: New York based newspaper

Quay Credit Union: Multi-Million dollar financial company

10 Proposals to F500 companies, even if one gets converted to sales and we have another “Nationwide” like client would bring serious money into Flamingo. (Prospectus Page 43).

Just trying to figure who the partnership is with “large CRM vendor” using the assistance of competition chart.

Spigit:

Worlds largest customer innovation platform in the world. Over 5million users in 150+ countries.
Customers include: UnitedHealth, Unilever, At&t, Siemens, Polaris, Pfizer
They are also San Francisco based company, and Flamingo had Andy Dale (CTO in 2015) appointed in San Francisco. Catriona Wallace also has a lot of S.F based connections as she regularly attends and speaks at conferences there.

Salesforce:

Also in the “Competitors” Chart. Also based in San Francisco which generated $6B revenue placing them in top 5 global CRM vendors as seen here: http://www.top-crm.com/top-crm-cloud.php

What interested me however was Salesforce development of an AI CRM called “Einstein AI” which was announced to be implemented today (19/09/16). Einstein AI is a predictive analytical CRM that helps identify buy signals. A bit different to Flamingo which helps execute buy signals.
Salesforce Einstein AI is the 9^th AI acquisition made. So a partnership with Flamingo is still on the cards.
Salesforce is also betting AI cloud softwares will provide a new edge to all CRM companies and will be its new path of investment.
http://www.bloomberg.com/news/artic...eils-artificial-intelligence-einstein-service
http://www.zdnet.com/article/salesforces-einstein-ai-platform-what-you-need-to-know/
http://www.techworld.com.au/article/607062/salesforce-betting-its-einstein-ai-will-make-crm-better/

Oracle:

Another CRM giant investing into AI. HQ is about 50km’s from S.F. In 2014 Flamingo had a partnership with Oracle which from memory was for trial of the software and they could possibly be looking to a progression further for generating revenue.

SugarCRM

Also falls into the top 5 CRM vendors. HQ about 80km’s from S.F Reasoning for this is because of Sugars strong relationships with Catriona Wallace. They elected Catriona as keynote speaker at their largest conference SugarCon mid 2016 so they clearly know what Flamingo is about back to front.

The Fortune 50:
As per roadshow they plan on signing a co’ larger than nationwide which would be in the F50 region. SYT has a deal. Two ASX listed companies I can think of that have a partnership of this scale is OBJ – Partnered with Procter&Gamble almost $150m MC
SYT – Partnered with AT&T almost $150m MC.
Given the F50 is on the East Coast
Potential Candidates for us:

Cognizant: CRM, supply chain management, business analytics

Xerox: Finance Solutions, streamline insurance claims

CVS Health: Retail healthcare (which is Cathie Rieds division as she wants to expand here)

Allianz Global: Largest insurance company in the world

Oracle: We were in discussions with them back in 2014

Bank of America Corp

3. Peers & Comparison

OBJ – Partnered with Procter&Gamble almost $150m MC
SYT – Partnered with AT&T almost $150m MC.
BRN – Mentions F500 Partnership with AI reaches $400m MC

Using this chart to find some peers:

(Prospectus Page 46)

From the chart we see essentially three fields – Automation/AI, Customer Analytics, Chatbots.
Flamingo has a combination of the three and essentially our main peers or competitors will be the businesses with a close proximity to Flamingo.

Baynote:
Probably our leading competitor/peer, similar to Flamingo in creating a “journey” via picking up consumer buying/browsing trends and personalizing product advertising according to the consumers history.

Founded in 2004, now has 12 F500 customers

Focused in Retail/Travel rather than Insurance/Finance (bigger money here)

Similar Board to Flamingo including PhD’s specialised in CRM all the way to Authors

Upto 30% Increase in Buying Conversion Rate for clients as seen by their successful case study of Netshoes.com.br (Brazils largest online sports retailer). Flamingo amazingly also quotes the exact same figure of “Upto 30% Increase in conversion rates”

Does not have a chatbot like “Rosie” needs human input and output to physically direct customers or have customers direct themselves, so not a “seamless” journey.

Data analytics is on customer to customer based but not product based.

DataRepublic

An open market to consumer data and data analytics for organizations to collaborate and gain insight on their consumers so clients can create a “journey” type experience in product marketing. Essentially used as a vehicle to transfer sensitive data analytics. More of a partner/peer than competitor.

For example “Westpac was to tap data from Qantas, they could know who is flying overseas and where they are going. This would be useful not only to sell the customer a new service but ensure existing products like their credit cards are not switched off for suspected fraud for transactions in foreign country” – more here: http://www.copyright link/technolog...ata-deals-to-target-customers-20160521-gp0pnq

Backing from WestPac and NAB

$10.5m raised (triple to CR8 – interesting to see a lot of moneyflow in this sector)

Targeting the same sectors of insurance and banking

Only provides transferring Analytics and ends there

No AI bots, no data analytics is made (only transferred securely), no personalization, no journey assisting consumers seamlessly finding products

Great complimentary startup to Flamingo

http://www.startupsmart.com.au/advi...million-series-a-round-led-by-qantas-and-nab/

SailThru

Quite similar to Flamingo, only differentiation I can clearly see is SailThru focuses on a Channel of communication based on consumer data/behaviour. So that they find the most efficient form of communication/marketing whether its an email or a text, however unlike flamingo it wont guide the customer virtually to its destination (or product). Rather just increase likelihood of the customer being engaged. Uses similar data analytics and consumer behavioural marketing strategies.

In the Media, Retail and Communications sector

Clients include Business Insider, Aol, FILA, S.F Chronicle

Founded in 2008 by Neil Chapel who was a Coder for Morgan Stanely in 2000

2010 - $1m seed fund, 2011 - $8m Series A, 2013 - $19 investing mainly from AOL, then another $20m from Venture Partners

Better than Flamingo in finding meaningful channel to communicate, however taking the customer from grabbing attention to what they’re looking for in complex financial products is what Flamingo excels at.

Once again large money flow, about $48m just in funding in 3years while CR8’s market cap remains at $24m including funding.

Rich Relevance

This is quite an interesting piece of tech and probably the only other competitor in our league other than Baynote.
Essentially uses Data Analytics like Flamingo to track consumer behaviour and engage them into the products. However rather than using a chatbot they customize the browser itself to guide the consumer digitally through the site/app efficiently to the destination. In simple it tries predict what the customer prioritizes for and provides the fastest steps there.

Furthermore it has a real-time feature, so when you physically step into a store they registered you can scan items via phone (which will give a price just for you based on your buying habits – gives higher price to something you’re likely to spend more on vice versa) also displays a map navigating you physically through the store.

Similar data/consumer analytics

Rather than Chat bot redesigns browser to fit consumer

Also includes a reality navigating feature for customers in store

230 Clients

9 Offices

Incredibly strong Management

Partners include IBM, CNET, SoftBank, Cognizant, Accenture, Oracle (wink)

They’re far ahead of us but a glimpse of what Flamingo’s potential can be.

5. Sector

(Excerpt from Oracle Report) This basically highlights exactly what Flamingo plans on doing with its AI bots and datacentric communication.

Gap in the market:

(Page 56 Prospectus)

Overall E-commerce market is rapidly growing however financial services are lagging behind. Flamingo’s solution:

(Page 54 Prospectus)
So that’s how they plan on filling the gap in the market.

Looking into the gap a bit further:

(Prospectus Page 57)

6. Summary

@4C MC: $24m EV: $18m

Approached by CR8

Awarded Cool Vendor of the Year, Number 2 Startup to watch, NSW entrepreneurship

Dream team management

Roadshows complete

Partnership with Oracle

Global from Day one no mucking about around with Small Business’s in Aus

Attempting to sign a Fortune 50 (Company larger than Nationwide) on East Coast, potential candidates: Cognizant, CVS Health, Allianz Global, Xerox, Bank of America

Clients: Nationwide, Daily Gazette, NAB, TheVillage, Quay Credit Union, Prime Finance

Sales in pipeline established with multiple Fortune250’s

Partnership with Clarion Group who are handing them clients

Over 10 Sales Applications with Fortune 500’s which can include more of Clarions Clients: Liberty Mutual, Massachusetts Insurance, Cisco, IBM, Microsoft, Mastercard, American Express, Visa, Citizens Financial Group, Pfizer

Looking for a deal (Currently in negotiations) with one of worlds largest CRM vendors which I’m guessing: Spigit, Salesforce, Oracle, SugarCRM

Peers have had capital raising ranging from $10.5m -> $48m so moneyflow exists into the sector. Usually investors/venture capitals look to fund companies which they believe have 10times value of their investment so peers are being valued about $100-$480m.

$700k revenue from Nationwide (Paid Trial). Also have another 3 paid trial with U.S Insurance Finance firms, and another 2 paid trials with Australian firms (including a wealth management firm for high end clients). So total of 5paid trials can assume revenue expected = $2 - $3.5m

Major gap in Market

Flexibility between human touch and artificial intelligence within software

Hopefully the fonts and paragraphs posts alright and all makes sense. If anyone has links to players/managers in the industry or wants to send this off somewhere else, no credit or copyright needed - feel free to do so lols.

All the best

Expand

I know your skills are exceptional with TA but honestly you should start considering yourself FA guru... I am speechless... As GT said, you have pretty much covered everything and some more....

Cheers and thanks for sharing
CR8 Price at posting: 3.8¢ Sentiment: None Disclosure: Held
13 Upvote

0 Great analysis

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