Mobile engagement platform Plexure (NZX:PLX) yesterday launched a deal that will see it dually-listed on the ASX.
The company is raising $35 million in a deal that will see it dually ASX and NZX listed.
Fast food giant McDonalds (NYSE:MCD) owns a 9.9 per cent stake in the company. It will chip in more money – enough to maintain its size of the pie.
The company made revenue in the six months between April 1 and September 30 2020 of NZ$14.4 million. This was 23 per cent higher than the prior corresponding period.
It anticipates NZ$29.1 million in revenue across the entire FY21, which in New Zealand is April 1 to March 31.
How Plexure works
Plexure’s specialty is helping consumer brands deliver 1-on-1 offers through their mobile devices. The platform is focused on driving traffic to physical stores and services more than 210 million platform users across 60 countries globally.
“They’re all designed to drive people to the fiscal retail environment, they drive foot traffic and uplifts on foot traffic,” CEO Craig Herbison told Stockhead from Auckland yesterday.
“The customer receives something one to one, not a kind of mass discount or mass offer that sits on a flier or voucher or something like that.”
The world “personalised offers” may ring some bells. You might be thinking of a program such as Woolworths Rewards or its New Zealand equivalent the Countdown Onecard scheme.
Herbison said while this was the general idea, Plexure does it better.
“We use a lot of data to understand what it is, we use transactional data – what you’ve bought and haven’t bought – and we use personal data and contextual stuff too like time and weather and those sort of things,” he said.
“I don’t know the personalisation behind the Countdown app for instance, I suspect in a customer it’s not as sophisticated as we could deploy for them.”
Rebuilding physical foot traffic
Herbison explained this business model could help retailers seeking to rebuild volumes themselves post-COVID, particularly in brick and mortar stores.
“Brands are wanting to rebuild volumes now as people are allowed to get out and about,” Herbison said.
“They’re wanting to rebuild volume back into physical stores so they’re putting money into marketing physical stores and that’s the gap they fill.”
While the rise in ecommerce has provided companies with opportunities it couldn’t realise with just brick and mortar stores, it’s not entirely positive news for everyone.
Take the grocery sector for instance, one of Plexure’s key markets.
“Ecommerce has been around for a while, but they still have the cost of logistics – supply and delivery – on top of their business models so it’s not that profitable channel for them,” Herbison noted.
“They want people in physical environments they don’t want them just doing sales directly online.”
Why Plexure is backed by Maccas
One intriguing aspect of Plexure is that fast food chain McDonald’s is both a customer and an investor.
Herbison explained that McDonald’s had been a long term client in a handful of markets. But starting from 2017, the companies realised they were becoming increasingly important to one another as their markets ramped up.
“We had a global agreement with them and I think we wanted to renegotiate some of the terms of that and we both realised we were becoming increasingly important them to them and they to us,” he told Stockhead.
“They wanted to have a bit of foothold in that they could effectively stop their competitors buying the business. They didn’t want to lose their hands on the technology and their customers.
“They’re on the same commercial terms as other customers but it is a statement of their support of our business in terms of how it’s a key part of their strategy in terms of digital adoption of customers.”
That deal was sealed in April last year, by which point Plexure powered the McDonald’s app in 48 countries.
The investment, worth NZ$5.38 million at that time, was the fast food giant’s first-ever investment in a mobile app vendor.
Following in notable footsteps
Plexure’s path of first listing on the New Zealand Exchange (NZX) and moving across the Ditch is not unprecedented.
There have been several success stories including A2 Milk (ASX:A2M) and Xero (ASX:XRO), both of which have become ASX giants in just a handful of years.
It will also be the third New Zealand company to list on the ASX in 2020 following BNPL stock Laybuy (ASX:LBY) and Aroa Biosurgery (ASX:ARX) – although neither stock listed on the NZX before the ASX.
Herbison said being a larger market, the ASX provided potential for a greater valuation of the company.
“There’s no question that there’s potentially greater valuations because you get greater coverage on the ASX and greater liquidity because of the greater size of the market,” he said.
For the time being Plexure intends to keep the NZX as its primary listing. But the company hinted it may migrate to a primary listing in Australia eventually.