finnCap Tech Chat | March goes out like a lion, too

Lorne Daniel, Research Director, Technology Sector:

"Now I understand there is something called a lockdown occurring. It’s a very strange thing but having spent the last few weeks of March buried in prelims, Excel spreadsheets and Word documents, as reporting season comes to an end every April the Lesser-Spotted Equities Analyst shuffles out of his annual hibernation to emerge blinking and yawning into Spring sunshine. It’s a bit like being Punxsutawney Phil dragged out of his burrow to look for his shadow in Groundhog Day, only without the fun of Bill Murray taking you for a joyride. Anyway, it turns out that this year I emerged to find that there is no emerging… Indeed I find that everyone else is as cocooned as an equity analyst in reporting season. So instead of bouncing outside to frolic in the fresh air (or as near as the City gets to fresh air) I am still inside, with my nose pressed to a window pane instead of a computer screen. Disappointing.

Yet this lockdown has allowed me first-hand observation of my teenage sons in their natural habitat; the sofa and its near surrounds. They are currently draped around it like a pride of lions lazing on a rock as they await dinner being brought in by the industrious lioness of the house. Instead of an occasional flick of the tail, I perceive an occasional flick of the finger across a mobile screen as they surf the social media seas or ponder the necessity of a new pair of trainers (not that necessary since they don’t actually use their feet). Growls and roars are heard when Internet coverage slows to a crawl and streamed video and games are lagged. I suspect this might be a scene repeated in a lot of living rooms across the plains of Essex and beyond; people are on their mobiles instead of frolicking outside. Shops and bars are withering in the sunshine but online and mobile businesses are thriving.

Which leads me on to Bango; these are good trading conditions for a mobile payments facilitator, the provider of the platform connecting our appstore payments with the mobile carriers. In particular one which can offer Direct Carrier Billing not just for digital goods like games payments and entertainment subscriptions, but also for fresh food and physical goods in some regions. When people are stuck inside around the world, their hands immediately reach for their mobiles. Oddly we use our mobiles more when immobile… it’s a funny world. Bango’s management are particularly delighted today since they have secured a very impressive deal during a very difficult period for deals. Advised by our finnCap Group colleagues at Cavendish, Bango has sealed a remarkable deal with Korean technology giant NHN Corp which is investing £6.5m for 60% of Bango’s non-core Audiens CDP business. It was bought in early 2018 for its technology, which speeded the launch of the Bango Marketplace offering. In the short term this deal boosts profit by removing a non-contributing subsidiary and allowing Bango’s management to focus on the payments platform and new data sales business. In the long term NHN believes Audiens has the making of a world class CDP provider and will pour resources, expertise and its technology into the business with Bango retaining a 40% stake in what could be a very lucrative investment.

Speaking as a small cog in the big finnCap mechanism, this really hasn’t felt like a lockdown at all. We have been whirring away through Reporting Season as busily as ever, with fund raisings and deals added to the usual heady mix of interims and finals (albeit fighting auditors to get some of the latter out for our AIM clients). I’ve yet to really notice lockdown or experience any of the peace and quiet that my lazing lions so enjoy with school being out.

Now just as I typed that last word, one of my sons called out “Dad do you want a bacon sandwich?” I was in slight shock at this, but managed to call back “Yes, thanks son I do fancy one!”. “Well I‘ll have one too when you make it” came the reply. It seems lions don’t change their spots either."

Happy Friday