Norwood Systems (NOR, $0.145, diluted mkt cap $151M)
Ready to accelerate growth after recent capital raise
Using low-cost local landlines, NOR’s World Phone app for smart phones and the corporate solution CORONA provide a very compelling alternative to low quality Skype calls and more expensive international mobile roaming. Users can buy mobile call minutes in-app as well as purchase a local telephone number when overseas, allowing them to call “as a local” at landline quality. World Phone eliminates the need for travelers to swap sim cards or carry multiple phones, while CORONA can substantially lower corporate mobile communication costs.
The app is seeing extremely fast mass market adoption. It was only launched on Apple’s iOS on July 31st and has already seen more than 1,000,000 downloads, while NOR achieved anannualised revenue run rate of A$1.3M by mid-November, i.e. in just three months since launch. The company will be reporting fortnightly on this metric going forward.
World Phone will be launched on the Android OS on November 30th, which opens up the global smart phone market, given Android’s >80% market share in operating systems worldwide. Additionally, World Phone has only recently become available in more than 30 languages, which will further drive download numbers.
In our view, World Phone has the potential to become THE global travel app as NOR is seeking cooperation with travel-related companies, such as recently signed Booking.com, and through potential integration with taxi-hailing (e.g. Uber), FX (e.g. OzForex), flight booking (e.g. SkyScanner) and accommodation booking (e.g. AirBnB). Additionally, there are ample white-labeling opportunities, such as with airlines, hotel chains etc.
To date World Phone has been the number 1 downloaded travel app in Apple’s App Store in 95 countries and the highest grossing app in 71 countries. Additionally, the app has been ranking in the Top 10 grossing apps in high-population countries, such as India and China, underlining the revenue potential for World Phone. Going forward, the upcoming Android launch, availability in more languages, free app-to-app calling for World Phone users (new feature) as well as white-labelling and signing corporate customers, will substantially drive download and revenue numbers
Following the recent A$5.4M institutional capital raise, which was five times oversubscribed and completed within a day, NOR is well-positioned to accelerate marketing of World Phone and drive user adoption. We believe NOR ticks all the boxes of a high growth company with Unicorn potential, i.e. a straightforward product that is highly scalable, addressing a global market. Hence, we regard NOR very favorably.
http://hotcopper.com.au/threads/...084/?post_id=16506935#.Vlw8cmew-70
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