MoneyonMobile (MOMT) has been busy lately. The Company, which has already established itself as one of the leading mobile payment platforms in India, recently found itself capital constrained as it tried to keep up with the rapid growth in adoption of their payment system. However, over the course of the last two weeks, MOMT has not only shored up their balance sheet and positioned themselves for Nasdaq listing, but they have added an intriguing strategic investor to their shareholder base.
MOMT Takes to Blockchain???
With today’s 8-K filing, MoneyonMobile has announced that the S7 Group has joined forces with them as a strategic investor. Not too much is known about the S7 Group here in the US, but they are a powerhouse in Eastern Europe. This is a multi-national conglomerate, having been in business for over 13 years since privatizing their biggest business unit, S7 Airlines, which is the second largest airline in Russia and the largest non-state owned airline in Eastern Europe.
They also have a ticketing agency, which one would expect. However, this is where things get interesting for MOMT. The S7 Group’s ticketing platform is based on blockchain technology and the organization has been one of the leading adopters of blockchain technology, being the first to use it in this application.
With the addition to MOMT’s board of two S7 representatives, one being a Stanford graduate, could MOMT be positioning themselves to bring blockchain to their payment process platform? That would certainly make a lot of sense for the Company.
I don’t want to get ahead of myself here, but the implications of this could be quite far reaching. For, while most investors have been focused on blockchain as relates to cryptocurrencies, industry experts have always thought the true genius of blockchain was as the processes engine for many different uses.
In an article, The 8 Best Uses For Blockchain in 2017, the author cites financial services as third on his list. More importantly, large companies are signing on to this. Here’s what American Express says:
“Blockchain technology promises to facilitate fast, secure, low-cost international payment processing services (and other transactions) through the use of encrypted distributed ledgers that provide trusted real-time verification of transactions without the need for intermediaries such as correspondent banks and clearing houses.”
Amex is by no means the only major payment processor interested in blockchain, as all major financial services companies are dipping their toes in the water.
For another example, Mastercard…
Mastercard is of particular significance here as MoneyonMobile’s COO, Will Dawson, is an ex-Mastercard employee who brought their payment platform to several emerging markets. His expertise is invaluable here and might even help to position the company for an eventual acquisition to a larger player? Hmmmm.
Funded for Growth
With the close of this investment from the S7 Group, along with closing on $7.6M in financing and converting most of their outstanding debt to equity, MOMT has completely shored up their balance sheet and positioned themselves to maintain their outstanding growth.
This is essential at this time, because, as the company detailed in their last earnings call, the biggest impediment to growth is working capital.
“…we do anticipate increasing our foot print of ATMs as rapidly as we can. There is a working capital constraint and a supply constraint on the MOM ATM unit itself but we do plan to emphasize that product going forward in 2018. I think the results suggest that strongly with only 3000 units in the field and it becomes our number 1 product that is a winner for us and we need to do more of it so we do intend to emphasize the MOM ATM in 2018.”
MoneyonMobile grew at a very rapid pace in 2017. In order to maintain their growth, they need to roll out their wildly popular MOM ATM offering as quickly as possible. It is also essential that they act now as the opportunity exists for them as the only player in the unbanked part of the market…they need to strike while the iron is not, so to speak.
Next Stop Nasdaq?
Now that the Company has a strong balance sheet, I expect their next big corporate news will be filing an application for a Nasdaq listing. This has long been a goal of the MOMT and they are now ideally positioned to make this move.
A Unique Player in a Huge, Untapped Market
MoneyonMobile is going after a massive opportunity. There are about a billion people in India who don’t have bank relationships, or have limited access to their current financial institution. Meanwhile, digital payments and ecommerce are coming rapidly to the country.
When you look at what has happened in China, it’s not hard to imagine India following in their footsteps. Nowadays, in China, most transactions are done via mobile. Cash is rapidly dwindling in its use. And, ecommerce has taken off…just look at Alibaba.
India is an untapped market of huge size. It is also a wide open playing field. With their balance sheet improved, an industry leading product for the market, and a blockchain strategy for the future, MOMT is well positioned to become a leading player in this market for years to come.
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