VANCOUVER, Oct. 29, 2018 /CNW/ - Katipult Technology Corp. ("Katipult" or the "Company") (TSXV: FUND), Katipult Technology Corp. (TSXV:FUND and FRA: K10), an industry leading and award-winning fintech company, is pleased to announce the results from the hosted an "Ask Me Anything" question and answer session with Brock Murray, Chief Executive Officer of the Company, held between October 15th and October 17th, 2018. The "Ask Me Anything" seminar was not conducted in real time to ensure compliance with the applicable continuous disclosure and filing requirements prescribed by securities laws and the TSX Venture Exchange.
What is the company vision?
We created the Katipult product to eliminate operational inefficiencies and regulatory minefields plaguing private capital markets. Our target customers are burdened with administrative workflows that to this day are largely manual, paper-based or heavily dependent on spreadsheets. Our vision as a company is to pioneer a new standard for investment management and allow the industry to migrate from the status quo to full digitized operations including online syndication, investor Know-Your-Client (KYC), signature collection, payment processing, and investor reporting.
Katipult aims to be the software infrastructure of choice for the industry by delivering a powerful system that is highly intuitive, easy to use, and can be configured for client-specific nuances.
What is the short term and long term goals?
Our two main goals as a business now are growing our revenue base, particularly our subscription revenue, and expanding our software delivery capabilities.
1. We've largely been focused on our product development to date and relying on inbound sales leads for revenue opportunities. We've recently announced the expansion of our sales efforts with additions in the US and UK to proactively seek out new business from our target customers. We are transitioning into a sales driven organization.
2. As we mature our product functionality and feature sets we have also been establishing delivery and support teams. We will be further developing these teams to ensure rapid client delivery as we scale our client base.
Our management team is becoming more goal oriented and we're adopting the Objectives and Key Results (OKR) Framework for defining and tracking objectives for our firm and their outcomes. This framework has been used by several major companies including Google, Linkedin, Twitter, and Uber.
How are you planning to grow revenue?
We have been successful adding new clients every month, and we're always looking to increase the overall number of firms using the Katipult software.
We are currently reevaluating the value proposition of our product and service offering by targeting client profiles that can fully realize the benefits of implementing the Katipult software into their organization. This approach allows our firm to substantially increase the average monthly subscription fees and improve the quality of our revenue.
As a software infrastructure business underpinning key investment processes, we believe there are opportunities to vertically migrate into a number of other attractive products/services as our client base grows and the activity volumes on the respective client systems grow.
Why have your subscription revenues been inconsistent quarter over quarter?
We started selling Katipult as a concept and we built out the software initially using the proceeds of sales. While this strategy gave confidence to our management team that we had identified a very large opportunity in the private capital markets, it was no easy task to develop and iterate the product while also trying to continually add and launch new clients.
To date we've largely been focused on growing out our product functionality and iterating the feature sets as the sophistication of our client base evolves.
You need to build the product, mature the feature set, and then make the delivery of the product scalable. The scalability of the product is the key driver of a subscription revenue business.
Are you the market leader in your competitive peer group?
As we've validated the pain points in the industry we've yet to come across a dominant software product servicing the industry. The majority of firms we've interacted with are largely still using manual paper-based systems, email, and spreadsheets. There are legacy software systems in the market but they are old, cumbersome, and insufficient for today's technology expectations.
This presents a great opportunity to establish Katipult as not just the market leader, but as the industry standard. Katipult has experience in 20 regulatory environments and has built an international client base as the same pain points persist across global private capital markets.
We are regularly told by prospective clients that Katipult is the strongest solution they have come across.
What is Katipult's blockchain strategy?
Our management team is very optimistic of blockchain technology and the concept of decentralization. We view ourselves as a technology partner to our clients and its important that we are aware and prepared for technology changes as they occur.
We expect all investment firms to move operations and workflows online, and we view blockchain as an evolution to the existing Katipult product. Key processes such as investor onboarding (KYC, AML), cross border payments, escrow and custodial services, and capitalization table management are areas that present very compelling applications for blockchain.
We have our core Katipult product but we've also recently announced our secondary trading product which is aimed to expand our capabilities as a firm as leverages blockchain technology. The project is currently in a pilot phase.
How are you deploying the capital from your recent $3.05 million CAD financing?
We recently raised $3.05 million CAD in a financing and those budgets were raised to assist with the increase in sales and marketing activity necessary. We have spent 3 years building and iterating our product with client input throughout its entire development. The focus is now sales and we expect by growing our sales team we'll be able to deploy our capital with measured return on investment (ROI) for each new team member.
As our operations scale there will be other positions and expenditures but sales and marketing is the main focus of our budgets.
Do you have plans to expand your Board of Directors (diversity)?
We are always looking to improve our company and board diversity is an area we've considered. We have a strong Board that is active and that is a great asset for our company. As we look to broaden the domain expertise at the board level, we will consider our representation as well when screening candidates.
What is your strategy to improve your transparency to investors?
As an early stage company there is a balance between execution of our commercialization strategy for our product, and managing investor expectations. Investors can review all our filings to better understand the market opportunity we're going after and the team we've built to help us execute.
Our website has all our material and required disclosures but we also have an active blog (https://www.katipult.com/blog) for industry and company updates. We also have an active Youtube channel among other social media distribution.
Do any institutions hold large ownership positions?
Management is not aware of any institutions with large positions in Katipult, however management has presented the Katipult story to institutional investors and retail brokers on a number of occasions since our November 2017 listing.
Do you have plans to list on a US stock exchange?
We have no plans of listing on a US exchange but we have been traded on the OTC in the US under the ticker symbol KTPPF. Our main listings are Toronto Venture Exchange under FUND and Frankfurt under K10.
Our prospectus for the Toronto listing is available on Sedar.
What brokerage lead your convertible debenture financing?
We raised $3.05 million CAD through a non-brokered private placement. We connected with a small group of individual investors that have a long term view of Katipult and we came to terms on the financing.
What is the % of insider ownership?
Insider ownership is approximately 60% of the company and its subject to TSXV 3 year escrow provisions. We pursued a public listing as a part of our growth strategy, not an exit strategy. Management believe the public listing would increase our company profile, provide access to capital markets, and attract talent to build the business.
Who are your main target customers?
Investment banks, commercial real estate investment firms, private lending firms.
What are you doing to minimize customer churn?
Katipult underpins core business processes within our customers' operations so the implementation phase and training are important to the long term adoption of the product. Our team has developed a proprietary methodology to setup and support Katipult customers, and we're looking to continuously improve this methodology with customer feedback.
Our research and development efforts are also iterating the product to have more powerful capabilities, and faster deployment cycles.
What advice would you give your 20 year old self?
Entrepreneurship is a long and difficult journey so build a phenomenal team to accompany you. Make sure you find a universal pain point in a sizable market and be persistent solving it.