Compliance Fintech Company Kyckr Launches IPO to List on ASX
The coming listing of Kyckr Limited offers IPO investors an opportunity to gain speculative exposure to demand for compliance services.
Kyckr Limited seeks to raise $8 million in an initial public offering (“IPO”) and targets to list on the ASX on 14th June 2016. The indicative market capitalisation of this float is nearly $28 million.
While the internet has opened up almost endless possibilities, it also facilitates money-laundering and financing of terrorism. Money can be moved from about anywhere in the world through digital communication platforms and online software, thus allowing criminals to launder money with ease. For that reason, businesses have the obligation to ‘Know Your Customer’ (“KYC”), which is in many developed countries part of compliance obligations. Fines and punishments for being involved in any type of unauthorised or illegal transaction have dramatically increased over the years, hence it is in the business’ interest to comply with KYC regulations.
The coming listing of Kyckr Limited offers IPO investors an opportunity to gain speculative exposure to demand for compliance services. Kyckr is an enterprise services company and its primary asset is Intellectual Property (“IP”) comprising of a network of corporate data, including 70 million legal entities from 150 registries in 88 countries. Kyckr provides a range of “know your customer” (“KYC”) services to its clients, selling corporate data in exchange for a subscription fee.
The Company has developed an extensive network with 150 registers to access corporate data and has witnessed early interest for its product. Kyckr’s has developed long-term relationships with a range of business registers globally and the company’s ability to secure new customers is expected to be the primary share price driver post IPO.
However, a lack of patents, industry regulations and funding requirements are risks. The company does not own any patents or trademarks and its key intellectual property rights are not registrable in Australia. While its global network and product offering present certain competitive advantages, transparency risks surrounding free float and lack of historical performance create sufficient uncertainty for the initial public offering.
Details of the IPO
Company: Kyckr Limited
ASX Code: KYK
Shares on Offer: 40m
Listing Price: $0.20
Market Capitalisation: $27.7m
This publication appeared first on The Australian.
Author: Simon Herrmann
May 17, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.