Purchase Includes Mobile App, 140,000 U.S. SMEs in Hospitality Vertical and Advertising Revenue
to Acquire US Hospitality Platform Tipsly
The consideration of AU$4.2m is paid in cash and BIG shares and split into two parts:
1) The acquisition of the sophisticated, state-of-the-art proprietary technology mobile application suite is valued at AU$1.8m. The technology acquisition element was negotiated in May 2017 at a share price of $0.60 and represents 3.0m shares. The technology is currently undergoing incorporation into the Big Review TV video review platform and app. This provides both B2B and B2C applications and importantly, speed to market of a vastly superior video review app with features that include:
BIG REVIEW TV Intellectual Property
- Geo Fencing and Geo Targeting
- Consumer Concierge Service
- In-app Purchase
- In-app Messaging
- In-app Booking Capabilities
- SME Dashboard
- Consumer Review and Reward System
- Targeted Brand Offers/Advertising
- In-app access to Uber
- Product Scanning
- Consumer Data & Analytics
2) AU$2.4m for the acquisition of the Tipsly platform. The acquisition includes:
a) A database of over 140,000 US SMEs in the US nightclub and alcohol vertical to whom BIG will be able to market video technology products;
b) 10% advertising commission to the vendors for a guaranteed minimum advertising revenue of US$12m from their clients during calendar year 2018. The vendors expect BIG to generate revenue by allowing liquor and beverage brands to promote their product to consumers via the App. In addition, these advertisers will be offered the ability to sponsor video products and shows produced by BIG; and generate further advertising revenue for the Company
c) An existing partnership agreement and ride affiliation program with global transportation company Uber that leverages corporate, social responsibility and rewards Big Review TV app users with safe transportation home, for example after consuming alcohol.
The second part of the acquisition is subject to due diligence and the satisfactory delivery of all documents, databases and achieving US$12m advertising revenue. Part two of the acquisition is to be paid in cash and script. The script value will be based upon an VWAP of each quarter of 2018 and tied to the delivery of $12m revenue.
Uber Technologies Inc. is a global transportation technology company headquartered in San Francisco, California, United States, operating in 633 cities worldwide. Users of the Big Review TV will be able to access an Uber ride from within the Big Review TV app and be rewarded with Uber credits when they make a video review of a business.
BIG Growth Strategy
See accompanying tech presentation (in link below). In line with BIG's global growth strategy, the purchase of Tipsly not only facilitates a significant and swift upgrade of the Company's current consumer video review app, but also provides software features for an SME-focused application with dashboard. This immediately activates BIG's third pillar business model providing full functionality of BIG's unique, video review-and-share, B2B2C video ecosystem. Strategically the acquisition also provides immediate market penetration into the US hospitality vertical, additional revenue across all three pillars of the business model and a significant opportunity to launch the BIG brand into the US market. The acquisition specifically benefits the BIG business model as follows:
Pillar One - The Tipsly tech suite will provide SMEs with an SME dashboard featuring geofencing, geo-targeting, in app messaging to customers, in-app purchase, in-app booking and access to consumer data and analytics. This provides SMEs with an irresistible video technology marketing service as an integral part of BIG's video ecosystem. Tipsly also has a database of 140,000 SMEs in a key US bars and clubs vertical.
Pillar Two - Enhanced consumer app provides consumer generated content for BIG's video library, shareable content, increased video views and significant brand advertising and sponsorship revenue with a minimum of US$12m in guaranteed advertising revenue in 2018.
Pillar Three - All of the Tipsly platform and app features benefit pillar three including consumer concierge services, in-app purchases, in-app booking, data analytics, product scanning, reward/incentive programmes and Uber access.
Commenting on the acquisition, Richard Evertz BIG's CEO said "The management team have been laser focused on expansion into the US whilst simultaneously ensuring that we deliver on the development of our three pillar business model and leverage our first mover advantage. Today marks the end of a long due diligence period and I feel our acquisition of Tipsly is a game-changer for BIG.
Firstly, it provides us with an enhanced app technology that I believe is well ahead of the competition. Secondly, we now have a direct pipeline of SMEs in a key vertical and on top of that, guaranteed advertising revenue. Finally, the partnership with Uber will be a unique way to attract and reward customers for using the app. I'm very confident this platform creates a large barrier to entry by completing BIG's unique B2B2C social media, video ecosystem and sets us up for a BIG brand launch in the US in the near-term. Something BIG is coming."
Final settlement of the acquisition will occur once the tech suite and Tipsly platform have been integrated into BIG's ecosystem. The Company will commence a global brand campaign in December 2017 in anticipation of the formal launch of BIG into the US in January and expect to launch the new video review app in Q3 FY18. It is anticipated that during FY17/18 the Company will achieve in excess of 1m downloads of the Big Review TV video review app that will feed and share BIG user-generated video content across the Internet creating a unique B2B2C video ecosystem and building BIG's video library. The Company anticipate providing further information.
Tipsly LLC is a review and reward app and platform developed for the US hospitality industry. It partners consumers with their local bars and nightclubs and rewards them for spending with their favourite bars and clubs by getting them home safely.
To view figures and the presentation, please visit:
About Big Un Ltd
Big Un Ltd (ASX:BIG) is the parent company of Big Review TV Ltd. Big Review TV are innovative disruptors in the online video space delivering subscription based video technology products and services. The Company has operations across Australia and in New Zealand, the United Kingdom and the United States, Hong Kong, Singapore and Vancouver and was listed on the ASX in December 2014.
Big Un Ltd