9 Spokes recommends the world’s best business software cloud applications for SMEs and integrates them into a smart dashboard, revealing key information on how their business is performing. 9SP has signed major clients, including Barclays, Deloitte and Suncorp (live in Q3 16 with $320k minimum monthly billings). We would not be surprised to see some further larger organisations signed up in the near-to-medium term, particularly in the US. The potential revenue from a single contract, such as a Barclays, in its own right is massive. 9 Spokes negotiates a licence fee that provides a base minimum payment over the term of the contract, while 9 Spokes accesses the App Margin as per the normal business model. The business in our view is much stronger with the $25m in bank and yet 25% cheaper from IPO. This creates opportunity for savvy investors.
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Thanks for the report. Much appreciated. How are you guys taking into account customer churn in your valuation models? All of the underlying software providers have their own churn rates c. 5% per month? Shouldn't this be considered?
Due to 9SP being in start-up phase, we valued it based on market opportunity analysis. It is more art than science. As adoption rates come through by channel partners & new contracts signed, we will modify our approach.
Ok. Thanks for your reply.