Rezolve delays $1.8bn NASDAQ flotation

Dan Wagner is a serial entrepreneur whose Powa Tag venture caught the headlines for all the wrong reasons?when it failed in 2016. Investors lost over $225m.?

Undaunted, Wagner founded?Rezolve?the following year but plans to float the new business on NASDAQ with a valuation of close to $2bn have been delayed.?

The Rezolve product is quite similar to Powa. It’s a shopping app which allows people to buy products instantly by scanning an advertisement or a restaurant’s menu. Rezolve’s USP is geofencing which gives subscribing merchants the chance to push messages and offers to any Rezolve customers in the local area.

Wagner has recruited heavyweight non-executive directors including?Steve Perry,?ex Visa Europe Chief Digital Officer,?Justin King, ex CEO of Sainsbury’s and?Sir David Wright, ex UK Ambassador to Korea and Japan. Joining them around the boardroom table is?Christian Angermayer, the German biotech billionaire.

Rezolve is headquartered in London with offices in USA, Germany, China, India, Taiwan and Mexico. LinkedIn shows staff growing swiftly through 2021 but plateauing at c.80 since the middle of 2022.

Although Rezolve was founded in 2017, it’s been quite slow progress until recently. The pace has picked up swiftly over the last fifteen months.

In December 2021, Rezolve announced that it would?list on NASDAQ via a reverse takeover by Armada Acquisition Corp, a blank cheque company whose investors include?Betsy Cohen, a SPAC veteran who has floated several payment businesses including Paya and Payoneer. Christian Angermeyer and Betsy Cohen have agreed to invest $40m between them.?

The proposed enterprise value is $1.8bn or a very punchy $12,000 per customer based on the published count of 150,000 merchants. Dan Wagner said:??“We are doing for mobile commerce what Shopify and BigCommerce Holdings have done for web commerce.”?

Rezolve?published an investor deck?in April 2022. It’s a fascinating read for anyone involved in the world of mobile marketing and payments as it contains some very ambitious business forecasts.

The deck shows $219m revenue in 2022 rising to over $1bn in 2024. By this time, Rezolve says it will have one million merchants after two years of explosive growth.

Sales are heavily reliant on China, notably via a partnership deal with Union Pay. The 2022 revenue forecast was split $169m via Union Pay and $50m from the rest of the world. According to the deck, the Union Pay partnership had brought 130K merchants already.????????

Union Pay was also supposed be a key driver of growth for Powa although this relationship was not all it seemed. The Financial Times?wrote a comprehensive article on the subject. It’s not clear how this new Union Pay partnership works either. Union Pay is a card scheme, similar to Visa, and operates through a network of member banks. It would not normally have the direct merchant or consumer relationships needed to distribute a product like Rezolve.?

And the partnership network is critical to Rezolve’s forecast of massive revenue acceleration. The company says that its partners represent a combined global reach of 20m merchants and over 1 billion consumers. In addition to Union Pay, Rezolve’s advertised partners include:

• Fiserv – this is via Telecash, Fiserv’s German business. The deck projects 53K merchants in Europe by end 2024 through Fiserv relationship although there’s nothing listed yet on the Telecash website.
• TATA??– a pilot was announced in Dec 19 but nothing has been in the public domain since then. Rezolve has hired?Sauvik Bannerjee, former CTO of a TATA business which?built a product similar to?like Rezolve.?Bannerjee previously worked with Wagner at Venda.?
• MobiKwik – an agreement was signed in Jan 2021 to “open India” and access 3m merchants.?Wagner told investors:?“They are updating their app in 2022 to include Rezolve technology.”
• Lotte Mart – in Dec 19, the South Korean supermarket rolled out Rezolve Inside as “part of a multi-million pound deal.”?

Since publishing its investor deck, Rezolve has announced new partnerships with?Computop, the leading German eCommerce gateway and?ACI?for the US market. Neither has yet listed Rezolve on its website which may indicate integrations are slower than management would have hoped.

Finally, in November 2022, with conditions becoming more difficult for all technology businesses, Rezolve announced that the the deadline for the flotation had been?put back to February 2023.

It’s going to be fascinating watching Rezolve’s business develop over the next few months. If the 2022 numbers substantiate the projections in the investor deck, the $1.8bn valuation will be solidly justified. If not, this is going to be a tough sell to jaded technology investors on Wall Street.

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