Perth-headquartered ZipTel Limited (ASX: ZIP) has signed a revenue share agreement with a UK company that has two of the world’s most popular sportsmen as significant shareholders and who believe they will be able to access the lion’s share of a market measured in the hundreds of millions.
Under the agreement with London-based Space Digital Media Limited Company (SDM), ZipTel will integrate its ZipT IP into the SDM-owned Convo App, in return for a share of revenue.
The Convo App is content driven social platform which uses world class low bandwidth technology that uses less data than conventional social platforms, even in areas with slower Internet speeds (i.e. 2G Networks). It is initially targeting the is targeting the growing Indian, Nigerian and South African markets.
Gareth Bale with ZipTel Executive Director Keaton Wallace
The company is backed by a world class executive team and boasts Indian cricket hero Virat Kohli and Welsh soccer star Gareth Bale as shareholders, who have a very sizeable global social media following and who will also act as ambassadors for the Convo App.
According to ZipTel Executive Director, Keaton Wallace, ZipTel is poised to receive significant revenues from a product backed by a world class executive and advisory team, that already has global consumer brands and publishers poised to integrated into the Convo App, and who has a defined monetisation strategy.
“The Convo App is backed by a world class executive and advisor team, recognised as the most experienced and prominent in the digital industry, who have secured prominent global ambassadors and brands, have mass reach and exposure plans in place and who have a very innovative monetisation model that will drive benefit to ZipTel on an ongoing basis,” Mr Wallace said.
“It is exciting for ZipTel and its shareholders to have its ZipT IP deployed within the Convo App, where we will share in the revenue without the requirement to use our own cashflow to fund its expansion,” he added.
Under the agreement ZipTel is exchanging integration of its core ZipT technology into the Convo App in return to share of all revenues generated by the product for a 10 year period.
The “Convo Platform Assignment, Licence and Development Agreement” will see ZipTel transfer the IP rights to the ZipT core technology to SDM in return for Royalty payments equal to 10%-20% of Net Revenue earned through sales and marketing of the Convo App.
SDM and its parent company, Sport Convo Limited, have projected up to 40 million MAUs of the Convo app in 2018, with the potential to grow that exponentially in their initial target markets of India, South Africa and Nigeria.
In the first five years SDM is forecasting the Convo App to generate revenues of £1.1 million in 2018 climbing to £69.7 million in 2022, with a net profit for that year estimated at £44.57 million.
SDM has already secured more than 3,500 global publishers, which the company says will enable the Convo App. to deliver unique content directly to 100’s of millions from launch with an estimated tc1.068 billion people across India, Nigeria and South Africa alone.
As part of the agreement SDM will invest up to £5 million in marketing the Convo App over the next three years, in addition to deployment of over £10 million in media “value”.
Mr Wallace says SDM has pulled together a very experienced executive and advisory team with a background in executing global roll out of strategies for technology based products.
SDM CEO Vishal Patel founded a corporate advisory firm which brokers private equity deals globally. Has interests and found a number of tech related startups. He has a strong commercial relationship with Virgin EMI, and he works with rights to Virgin EMI in India for music and brand collaborations.
They also have an exclusive advisory partnership with Be Seen Media Ltd, a business that links brands with publishers and influencers and who will play a key role in the strategic growth and marketing of the Convo App. Advisors working with Convo App under this agreement include Lars Rasmussen, co-founder of Google Maps and former chief engineer of Facebook, Shailendra Singh, Asia’s most experienced music promoter and India’s most reputed marketers (having done deals in excess of $3 billion), and Tony Barnes, Head of Digital at Virgin EMI/ Universal Music Group.
The Convo App will have its own “:in app” advertisement engine for publishers to do paid advertisement “in app” to gain more visibility and following. This feature will allow The Convo App to gain significant amounts in revenue from its publishers, whilst giving publishers huge value for money in terms in additional reach and followers compared to its competition.
In addition, the Convo App will generate revenue from traditional “in app” advertisement placements and banner ads placed between content or on user interaction. The Convo App will enable publishers to drive significant traffic to their pages benefiting from advertisement revenue splits ongoing. With the extensive number of publishers that will be on the platform advertisement will be a strong revenue stream going forward.