Software solutions company Adveritas (ASX: AV1) has unveiled a revised contract with its marquee Latin American client Rappi, a Colombian on-demand delivery company.
Back in May this year, the “super-app” raised $1 billion in capital to record the largest ever funding round for a Latin American company.
Rappi enables purchases of a variety of products and services from categories ranging from restaurants and supermarkets to hiring scooters.
The app’s co-founder and president, Sebastian Mejia said he intends to “revolutionise the way consumers shop and live their lives,” across multiple countries including Brazil, Colombia, Mexico, Argentina, Chile, Uruguay and Peru.
Having agreed an initial deal in April this year, earlier today Adveritas said it has amended the terms “given increased traffic volumes” with Rappi now committing to a higher contract value of US$22,500 per month – a 50% uplift on its initial monthly subscription of US$15,000 first announced in April.
The announcement follows on from yesterday’s news that the company had revised an existing contract with WPP mobile agency, MUV.
In the case of MUV, Adveritas reported that increased demand for TrafficGuard had led to the two companies renegotiating their deal by extending the contract up to 15 months.
The new agreement means Adveritas will receive a higher monthly subscription fee of US$10,000 (A$14,500) over the course of the contract, representing an uplift of approximately 400%.
The potential for excess data usage fees remains a part of the new, upgraded contract providing “further fee upside”, the company said.
Since signing its contract, Rappi has been a strong advocate of Adveritas’ TrafficGuard product, an “ad fraud mitigation” solution that detects, mitigates and reports on digital ad fraud before it hits digital advertising budgets.
The product offers three layers of protection and according to the software solutions company, “ensures that digital advertising results in real engagement”.
Rappi participated in a case study at the Mobile Growth Summit in New York on 18 July 2019, where it highlighted its success from using TrafficGuard to other industry participants and reported that it had detected 25-40% of invalid clicks that improved its return on ad spend by 25%.
Moreover, Rappi reported that automation of fraud mitigation removed the burden of manual analysis from its growth team thereby saving 30% of the team’s time.
The commercial success of TrafficGuard was further highlighted by Adveritas with the company declaring that since the product’s commercial launch in February 2019, Adveritas has experienced “significant revenue growth momentum” including a 2.6x boost in annualised recurring revenue to approximately A$1.6 million.
Having recorded a strong start to the product over the past year, Adveritas has confirmed that its overarching focus remains on growing recurring revenue via “long-dated SaaS contracts with enterprise-level clients” and other industry participants.
“We are delighted to provide ongoing fraud protection services to Rappi. As well as protecting ad spend, TrafficGuard has helped Rappi to increase its advertising return on investment and confidently scale its advertising initiatives to meet its growth objectives,” said Mathew Ratty, chief executive officer of Adveritas.
“We are now starting to see the benefits of our sales and marketing efforts with increased revenue growth in the month of October of at least 20%,” said Mr Ratty.
Adveritas shares to jump 7% higher up to $0.145 per share in morning trade.