9 Spokes receives first payment from Bank of America contract
9 Spokes has received its first revenue from a new deal to provide its business insights platform to Bank of America’s small business customers.
Business insights company 9 Spokes (ASX: 9SP) has received its first revenue from a deal inked less than two months ago with Bank of America for its technology platform services.
In late August, the New Zealand-based company secured a three-year contract to provide the multinational bank’s 3.5 million small business customers with access to its white-label business operations platform.
In an update today, 9 Spokes announced it has now received the first of three payments making up the implementation fee due by the end of the year.
This implementation fee equates to about 30% of 9 Spokes’ total revenue for the 2019 financial year of NZ$8.2 million (A$7.62 million).
Under its initial three-year deal with Bank of America, 9 Spokes will also receive an annual licence fee. While the exact figures have not been disclosed, the company confirmed this fee equates to about 35% of its FY2019 revenue, which would be around NZ$2.87 million (A$2.67 million).
9 Spokes co-founder and chief executive officer Adrian Grant said the company’s contract with Bank of America is significant for several reasons.
“Firstly, it represents substantial revenue to the company through implementation fees, licence fees and in the future through app marketplace transactions,” he said.
“Secondly, and equally important, it provides continued validation of our vision and the opportunity to enter the US market alongside a distinguished organisation,” Mr Grant added.
Platform integration
Bank of America is incorporating 9 Spokes’ white-label platform into its existing Business Advantage 360 cashflow dashboard to give its small business customers a comprehensive view of their finances and enhanced insights to monitor their business performance.
9 Spokes said it also expects to derive “material revenue” from the bank’s small business customers through an app marketplace, once launched.
In its August announcement relating to the details of the Bank of America contract, 9 Spokes said the revenue expected to be derived from the app marketplace was “uncertain and dependent on a number of factors, such as the level of [small business] customer adoption, usage of the app marketplace, the timing in relation to the on-boarding of app partners and the value of contracts with such partners”.
By afternoon trade, 9 Spokes shares were up 11.11% to A$0.02.