Society Cross Inc. (NASDAQ: SOPA) has introduced that it has entered right into a structured financing settlement with Strattners FZCO to entry capital effectively. In accordance with the settlement, SoPa can promote its frequent inventory to Strattners price as much as $40,000,000 on SoPa’s request through the subsequent 36 months, topic to sure limitations. The Firm plans to make use of this capital in its working subsidiaries, together with Considerate Media Group Inc. and NusaTrip Inc., to put money into acquisitions and strengthen its working capital. The financing technique will likely be applied solely when market circumstances for SoPa’s frequent inventory are favorable.
Firm Overview
SoPa is a data-driven ecosystem that was based in 2018. It focuses on loyalty, fintech, and e-commerce within the quickly rising markets of Vietnam, Indonesia, Philippines, Singapore, and Thailand. These nations account for greater than 80% of the inhabitants in Southeast Asia. SoPa operates six interconnected verticals, together with loyalty, digital media, journey, telecoms, way of life, and F&B, and has workplaces in Los Angeles, Bangkok, Ho Chi Minh Metropolis, Jakarta, Manila, and Singapore. It seamlessly connects thousands and thousands of registered customers and lots of of hundreds of registered retailers and types throughout a number of product and repair classes all through Southeast Asia, with a important concentrate on acquisitions.
SoPa makes use of superior know-how to offer a extra personalised expertise for patrons throughout their buying journey and to revolutionize your complete retail worth chain in Southeast Asia (SEA). The Firm operates a number of subsidiaries, together with Considerate Media Group, a Thailand-based social commerce-focused premium digital video multi-platform community; NusaTrip, a number one on-line journey company in Indonesia; VLeisure, which provides resort administration and fee options and is Vietnam’s main supplier; Gorilla International, a cellular community operator based mostly in Singapore; Leflair.com, Vietnam’s high way of life e-commerce platform; and NextGen Retail, an e-commerce platform based mostly in Indonesia.
Enterprise Unit Description
SoPa goals to fulfill the rising demand for higher providers in Asia by buying market-leading firms and partnering with visionary entrepreneurs. The Firm focuses on six verticals, as mentioned beneath.
Loyalty
SoPa Loyalty provides a common, open-loop loyalty platform that generates everlasting buyer loyalty, replaces money discounting, and creates further revenues for retailers. The platform helps retailers retain current prospects, appeal to new ones, scale back buyer turnover, and sync buyer knowledge in actual time. Customized advertising and marketing campaigns are additionally a part of the SoPa Loyalty bundle.
Digital Media
Considerate Media Group (TMG) is a Los Angeles-based firm that operates a world multi-platform community. TMG has generated tens of thousands and thousands of {dollars} in advertiser-branded content material and deployed hundreds of movies which have garnered billions of views throughout social media platforms corresponding to YouTube, Each day Movement, and Fb. It has additionally sourced lots of of Asian content material producers and digital media/product builders and launched manufacturers into the markets of Thailand, Vietnam, the Philippines, China, and the US. Through the years, Considerate Media Group has gathered social influencer knowledge, which it now makes use of to trace 1 billion authenticated world video views a month throughout key social platforms.
Journey
NusaTrip is a number one on-line journey company (OTA) in Southeast Asia that gives providers to people and companies. They’ve linked greater than 80 million distinctive guests with over 500 airways and 200,000 inns worldwide by means of varied native fee choices. NusaTrip has partnerships with low-cost carriers in Asia and full-service airways globally, enabling them to supply real-time world fare buying to assist vacationers discover one of the best offers. In addition they work with resort wholesalers in a number of nations to offer real-time worth optimization for his or her prospects.
Life-style
Leflair is a web-based buying platform that gives entry to over 3,500 Vietnamese and worldwide manufacturers in vogue, equipment, magnificence, private care, and residential furnishings. It helps to increase markets by enabling native manufacturers to promote their merchandise internationally and overseas manufacturers to enter new markets. Moreover, Leflair has filter and search packages designed to optimize the consumer’s buying expertise.
Telecom
Gorilla is a cellular digital community operator based mostly in Singapore that leverages blockchain and web3 know-how. It has plans to increase into Malaysia, Vietnam, and Thailand and goals to extend its registered consumer base to over 50,000 whereas driving app downloads to over 20,000. Gorilla provides an revolutionary suite of providers that embody e-SIM playing cards, native calling, worldwide roaming, knowledge, and SMS texting. These providers are fully owned by the customers, permitting for simple switch or sharing by way of blockchain wallets.
Meals & Beverage
On this vertical, there are three major companies.
– Pushkart is a outstanding on-line grocery supply utility in Metro Manila, with a mean transaction quantity of $40. This unit goals to increase its service provider protection to 25 grocery shops, lengthen its attain to 10 new Philippine cities, improve its registered customers to over 300,000, and enhance app downloads to over 150,000.
– Handycart is a web-based grocery supply app based mostly in Vietnam. It focuses on serving the Korean restaurant market in Hanoi. Handycart plans to increase its service provider protection to 500 eating places in Hanoi and goals to enter the HCMC market. Handycart can also be seeking to improve its registered consumer base to over 500,000 and drive app downloads to greater than 200,000.
– Mangan is a well-liked meals supply app working on Luzon Island. It expenses retailers a fee of no less than 20 % and supply charges. On common, every transaction by means of the app quantities to round US$13. Mangan goals to extend its registered consumer base to over 500,000 and obtain over 150,000 app downloads.
The Firm accomplished an preliminary public providing and began buying and selling on Nasdaq underneath the ticker SOPA in November 2021.
Under, we are going to focus on the important rationale for protecting this Firm.
1. THRIVING MARKET OPPORTUNITY
SEA is experiencing robust financial progress, an increase in inhabitants and urbanization, a rise within the center class, and a rising adoption of cellular know-how. These elements present market alternatives for the Firm.
As of 2020, the gross home product (GDP) of Southeast Asia (SEA) was $3.1 trillion, which is considerably decrease than the GDP of the European Union (EU) and the USA (US), which have been $15 trillion and $20.8 trillion respectively in 2020. Nevertheless, SEA has seen great financial progress lately, surpassing progress in main world economies corresponding to Japan, the EU, and the US. In accordance with the Worldwide Financial Fund (IMF), since 2010, SEA has averaged 4.6% GDP progress, whereas Japan, the EU, and the US have solely achieved 0.7%, 0.8%, and 1.7%, respectively.
Southeast Asia (SEA) is experiencing important inhabitants progress and a thriving web financial system. In accordance with the United Nations Inhabitants Division, the inhabitants of SEA nations in 2000 was round 525 million, and it has since grown to an estimated 668 million in 2020. Moreover, the area’s web utilization is rising quickly. The Google Temasek e-Conomy Report reveals that in 2020, 40 million new customers joined the web within the area, bringing the full variety of customers to 400 million from 360 million in 2019 – because of this 70% of SEA’s inhabitants is now on-line, in comparison with simply 20% in 2009. Moreover, cellular web penetration in SEA now exceeds 67%, and the web sector’s gross merchandise worth (GMV) is projected to surpass $300 billion by 2025.
SoPa’s progress is anticipated to be supported by these macro elements within the coming years.
2. ROBUST GROWTH STRATEGY
The Firm has an efficient progress technique to benefit from upcoming market alternatives. Key components of the expansion technique embody:
- Acquisitions:
The Firm plans to accumulate e-commerce firms to increase the SoPa ecosystem all through Southeast Asia, specializing in Vietnam, the Philippines, and Indonesia.
The Firm’s most noteworthy acquisition is Considerate Media, a digital media platform that enhances the attain and engagement of the Firm’s e-commerce ecosystem and retail companions. Considerate Media creates and distributes digital promoting campaigns throughout its multi-channel community in SEA and the US. Its data-rich multi-channel community has uploaded over 675,000 movies with over 80 billion views. The present community of 263 YouTube channels has onboarded over 85 million subscribers with a mean month-to-month viewership of over 600 million views. In accordance with Accenture, the social commerce market is anticipated to develop to $1.2 trillion by 2025 with a CAGR of 26%. SoPa is poised to reap the complete advantages of this upcoming enlargement by means of this acquisition.
In July 2023, SoPa introduced that its on-line retail platform, NusaTrip, had acquired Vietnam Worldwide Journey and Service JSC, Indonesia’s first IATA-licensed journey company. The acquisition added US$2 million in GMV to NusaTrip
‘s income base.
Due to this fact, the Firm goals to accumulate further e-commerce platforms and functions throughout varied sectors to increase its service choices and appeal to new customers and retailers. - Loyalty System:
SoPa launched its common loyalty utility, the Society Cross Loyalty Pockets, on June 28, 2023. This utility will allow customers and retailers to conveniently buy, earn, and redeem loyalty factors referred to as Society Factors. With Society Factors, customers can use a cashless fee choice and switch bonus factors earned from one vertical, corresponding to way of life, to a different, corresponding to journey.
Since its inception in 2018, the Firm’s imaginative and prescient has been to construct the next-generation digital ecosystem and loyalty platform in Southeast Asia. This imaginative and prescient has attracted over 3.3 million registered customers and over 650,000 registered retailers. SoPa plans to combine all its ventures inside the ecosystem into the Loyalty App by the tip of This fall 2023 – it will allow the Firm to offer a seamless buying expertise throughout its community of over 650,000 retailers.
SoPa’s loyalty system goals to extend buyer loyalty and generate further income for retailers throughout a number of verticals in SEA. Thus, this initiative ought to assist the Firm strengthen and enhance its maintain throughout customers in varied verticals.
- Strategic Partnerships:
In August 2023, Society Cross (SoPa) introduced a strategic partnership with 2C2P, a full-suite world funds platform headquartered in Singapore. The target of this partnership is to drive e-commerce buying in Southeast Asia. With the collaboration, Society Cross’s loyalty app will have the ability to supply 2C2P’s intensive vary of other fee choices to prospects based mostly within the Philippines and Indonesia.
A latest IDC InfoBrief commissioned by 2C2P forecasts a 121% improve in spending on Southeast Asia’s digital financial system by 2026. It additionally predicts that digital funds will comprise 92% of the full digital financial system funds by 2026, up from 80% in 2020. SoPa, to take full benefit of this chance, has partnered with 2C2P.
One other noteworthy accomplice is Amilo, a Vietnam-based supply firm. By this Life-style Vertical partnership, SoPa provides a handy and hassle-free supply service of merchandise from the service provider on to the patron’s house or workplace with only a faucet of a button.
Strategic partnerships are important for the success of the Society Cross ecosystem. Such collaborations assist the platform supply extra value-added providers to each customers and retailers. As well as, partnerships allow SoPa to entry its companions’ shoppers and customers at minimal value and to advertise the usage of Society Factors (when they’re out there) extra extensively. - Maximizing Shopper Transactions:
The Firm’s foremost progress drivers for its verticals are rising its client base, changing registered customers into lively ones, boosting transaction frequency, and maximizing basket sizes. To realize this, SoPa adopts a complete advertising and marketing strategy that features social media, electronic mail, SMS, QR codes, tailor-made promotional campaigns, and public relations engagement to develop its base of registered customers.
In October 2023, Considerate Media Group (TMG) introduced their plans to launch their first live performance in Jakarta, Indonesia, within the fourth quarter of FY23. These concert events will likely be streamed on TMG-affiliated social media channels, permitting advertisers to collaborate with TMG-connected influencers to advertise these well-liked music occasions and attain their desired audiences. TMG goals to achieve over 2.5 million individuals by means of these reside occasions over the following yr, creating important sponsorship alternatives for advertisers and the ten,000-member influencer neighborhood in Indonesia. TMG plans to host one month-to-month live performance, with projected annual earnings of $680K.
On this means, by offering revolutionary options for each side of customers’ every day lives, the Firm can improve alternatives for cross-selling and maximize client pockets share.
- Increasing Service Choices To Profit Retailers:
SoPa acknowledges the significance of retailers in its enterprise and is devoted to rising its registered service provider base. To realize this aim, the Firm gives retailers with cutting-edge know-how and advertising and marketing options that assist to enhance their gross sales, scale back prices, and improve operational effectivity. Advertising and marketing outreach instruments corresponding to web sites, public relations, social media, and focused gross sales efforts are used to onboard new retailers.
In October 2023, Considerate Media Group introduced the launch of the first-ever MediaGram, “Sit Up”. The challenge is a partnership with Indonesian celebrity actor and producer Chicco Jerikho. It goals to develop a web-based neighborhood that promotes a wholesome and fitness-centric way of life in Indonesia. TMG expects to create new income fashions by means of this partnership with health golf equipment and clothes retailers. In different phrases, the Firm goals to develop revolutionary methods that profit current and new retailers, leading to general progress.
3. RECENT FINANCIAL PERFORMANCE
SoPa introduced its Q2 FY23 leads to August 2023, revealing a outstanding progress of 338.3% YoY in revenues, which elevated from $499,062 in Q2 FY22 to $2,187,232 in Q2 FY23. Moreover, the Firm’s gross revenue improved considerably from a Q2 FY22 gross lack of $138 to $577,159 in Q2 FY23. Moreover, the Q2 FY23 gross margin elevated to 26.4%, a outstanding enchancment from the Q2 FY22 gross margin of 0.0%.
Within the first half of FY23, the Firm skilled a considerable progress of 348% YoY in revenues within the 5 largest economies of Southeast Asia. Moreover, the Firm’s money working bills decreased by 28% in the identical interval. One other important enchancment is the gross margin, which elevated from a adverse 1.6% in H1 FY22 to 29.9% in H1 FY23.
As of March 31, 2023, the Firm had a robust stability sheet with money available of $10.8 million ($0.38 per share) and a e book worth of $12.7 million ($0.45 per share).
The Firm has proven spectacular progress in each income and revenue margins. It’s assured it’ll obtain money profitability within the second half of the fiscal yr 2023. Primarily based on its previous efficiency, plainly SoPa will hold its guarantees. Regardless of solely buying its two principal subsidiaries, Considerate Media and NusaTrip, within the second half of the fiscal yr 2022, each subsidiaries contributed over 90% of SoPa’s revenues within the first half of the fiscal yr 2023.
Each of those subsidiaries are anticipated to considerably contribute to the Group’s income and earnings within the second half of fiscal yr 2023. NextGen Retail, the third-largest subsidiary of SoPa, not too long ago acquired a major retailer of Apple merchandise in Indonesia. Because of this, it’s anticipated that NextGen Retail will expertise fast progress within the second half of fiscal yr 2023, and these two essential verticals will drive the Firm in the direction of money profitability within the second half of fiscal yr 2023.
RISK ASSESSMENT
Primarily based on the knowledge supplied, the Firm has a promising future. Nevertheless, it is usually uncovered to sure dangers. Firstly, SoPa operates in a extremely aggressive internet-based e-commerce area and competes with different firms that supply comparable user-vendor connection expertise, fee processing, funds switch content material, and advertising and marketing knowledge providers. A few of these opponents might have higher business expertise or monetary sources than the Firm, and consequently, SoPa might not have enough sources to compete successfully.
It’s necessary to notice that SoPa’s platform operates in a brand new and untested market, making it difficult to anticipate buyer adoption and renewal charges. Moreover, it’s tough to gauge the demand for SoPa’s options, the general market measurement and progress charge that the platform addresses, the potential entry of aggressive merchandise, and the success of current ones.
Thirdly, the Firm’s income closely depends on the variety of profitable consumer transactions accomplished. Any system interruptions or decreased demand for the products and providers provided on the platform might have adverse monetary implications for the Firm.
CONCLUSION
SoPa was established in 2018 and has skilled outstanding progress in simply six years. The Firm reported a 338.3% year-over-year improve in Q2 FY23 revenues and achieved a optimistic gross margin of 26.4%.
The Firm goals to revolutionize the retail chain worth in Southeast Asia by means of its revolutionary know-how and platform. Its final aim is to offer personalised experiences to prospects. SoPa depends closely on acquisitions to realize this. The Firm has a robust money place to assist this technique and not too long ago entered right into a structured finance settlement with Strattners FZCO. Primarily based on its monitor file, SoPa has the experience and expertise to seamlessly combine newly acquired firms into its platform.
SoPa seems to have all the required capabilities to revolutionize and take over the retail chain in Southeast Asia. Nevertheless, the Firm faces powerful competitors, and the SoPa platform market remains to be in its early phases, probably affecting its prospects. Due to this fact, it’s advisable to train warning when contemplating any funding within the Firm.
Reference:
https://thesocietypass.com/investor-relations/
https://www.acnnewswire.com/press-release/english/87000/society-pass-inc-(nasdaq:-sopa)-announces-equity-line-of-up-to-$40-million-to-invest-into-operating-subsidiaries-projected-to-go-public-in-2024
https://www.sec.gov/ix?doc=/Archives/edgar/knowledge/1817511/000160706223000144/sopa123122form10k.htm
https://alvinology.com/2023/07/01/society-pass-launches-loyalty-app-and-points-system-in-southeast-asia/
https://acnnewswire.com/press-release/english/85682/
https://www.acnnewswire.com/press-release/english/85398/
https://sopa-public-picture.s3.ap-southeast-1.amazonaws.com/2023.10.24_TMG_Concert_PressRelease.pdf
https://finance.yahoo.com/information/society-pass-inc-nasdaq-sopa-121700021.html
https://acnnewswire.com/press-release/english/85761/
https://www.sec.gov/ix?doc=/Archives/edgar/knowledge/1817511/000160706223000393/sopa063023form10q.htm
