Aussie-listed Way2VAT says it’s secured a more than $1 million placement to accelerate the commercialisation of its Smart Spend Debit MasterCard, the world’s very first to fully automate VAT/GST returns.

The Israel-based tech play has received firm commitments from new and existing institutional and sophisticated institutional investors to raise $1.09 million at an issue price of $0.051 per share which represents a cracking 18.5% discount to the five-day volume weighted average price of $0.0626 recorded as W2V went into its Tuesday trading halt.

The company is also prepping to undertake a Share Purchase Plan (SPP) to existing shareholders in Australia, Israel and New Zealand, aiming to raise up to an additional $500,000, with an eye to providing an opportunity for existing shareholders to further invest on the same terms as the Placement.


Lots of takers

W2V directors who are eligible shareholders – namely Amos Simantov and David Buckingham – intend to participate in the SPP, while subject to shareholder approval, director Robert Edgley has also committed to subscribe for an additional $10,000 worth of Shares under the Placement at the Placement Price.

What else?

  1. An additional 196,078 Shares under the Placement will be made with shareholder approval, as it relates to the Director’s participation
  2. The Placement is not underwritten
  3. Placement Shares will rank equally with the Company’s existing ordinary shares on issue
  4. Settlement of Shares under the Placement is expected to occur on Wednesday, 15 June 2022


Targeting growth opportunities, balance sheet strength and working capital

W2V intends to use the funds to back a bunch of Smart Spend Debit MasterCard initiatives including accelerating the products growth of the card in the UK and European markets.

In a world-first in April, W2V partnered with Railsbank to launch the Smart Spend Debit Mastercard, which fully automates VAT/GST returns.

The card allows companies to submit spend receipts and capture invoices through its proprietary technology platform.


Rolling out

The AI tech is an end-to-end process from capture of the receipt through to payment that automatically analyses, reconciles, sorts and submits documentation to foreign tax authorities.

Way2VAT (ASX:W2V) says the initial rollout of the Smart Spend Debit MasterCard is targeting four key sectors, focussing on key customers across the aviation, security, automotive and technology sectors  as they showcase the broad range of capability and different uses the Smart Spend Debit MasterCard has to offer.

Way2VAT CEO and founder, Amos Simantov says the placement not only expedites the company’s strategic priorities and provides further ballast to the balance sheet but will help meet a growing global demand.

“The funds raised will support the expansion of our growth initiatives in the timeframe we have forecast. Feedback from customers already using the Smart Spend Debit MasterCard has been positive as it saves both time and effort by controlling spending as well as managing VAT/GST claims all in the one platform. “

Simanatov said it was the strength of support shown by both new and existing investors led to the placement’s upsizing.

“The funds raised will support the expansion of our growth initiatives in the timeframe we have forecast,” he told Stockhead.

“The need for Way2VAT’s Smart Spend Debit MasterCard is growing as more enterprises are resuming business travel. With local and foreign travel demand increasing, we see this as a great opportunity to promote the card as it will significantly benefit the way businesses manage their expenses and VAT reclaims.”

The first focus then, in generating greater outreach and hitting higher revenue targets, will be the development of a new website focusing on the Smart Spend Debit MasterCard to effectively increase conversion of signups.

W2V will also continue investing and refining its proprietary tech to fast-track its adoption and expansion via increased marketing, expanded distribution channels in the UK and Europe, where demand for Way2VAT’s patented AI tech requires investment in further staff numbers in the UK office.

As the European summer descends, W2V says billions of dollars in Value Added Tax (VAT) still go unclaimed each year by companies who don’t even know how to recover VAT on their global corporate travel – and the W2V platform can reclaim VAT from over 40 different tax jurisdictions.

It’s a classic – and massive – niche market.

“We looked at that opportunity, and we’ve been saying that it’s about $20 billion of unclaimed money sitting in jurisdiction and tax authorities around the globe,” Simantov, told Stockhead last month.

The company’s first client was Amdocs, a Nasdaq-listed giant that delighted in Simantov’s idea from the very start.

“I approached Amdocs, which is one of Israel’s largest companies with 30,000 employees, and asked them whether they were reclaiming their foreign VAT, and they said no,” explained Simantov.

“Amdocs instantly said they wanted to use our platform, and the rest was history.”

This is because the process of reclaiming the money is just a convoluted disaster, exacerbated by the bureaucratic idiosyncrasies in dealing with the tax laws of other countries.

On top of that, the hassle of keeping bits of paper receipts, getting an approval, and then manually submitting them to the finance department meant that unsurprisingly a lot of employees just don’t bother with it.


This article was developed in collaboration with Way2VAT, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.