WEYL $WEYL read Rex update closely....
Thanks again to my good friend Andy Bell!
Chris LaCoursiere
AtozPay Visit
My name is Wilson Bell. At the behest and expense of a group of WEYL shareholders I travelled to Jakarta, Indonesia to evaluate AtozPay. I am also a WEYL and AtozPay shareholder. I spent over 30 years as a systems and software engineer and am the cofounder and former CTO of Snipp Interactive Inc. Any errors or misunderstandings in this document are mine. Forgive any misspellings and other minor format and grammar issues. I’m doing this on a little chromebook in a cab in Bangkok.
I was met at the airport by Eddie Foong the COO of Weyland Tech. Create App was Eddie’s brainchild and Eddie was responsible for bringing in the key players of AtoZPay including the CEO, Djunaedy Hermawanto, the current CTO Tommy Haryanto and a few others. Djunaedy was out of town but from what I could gather he engenders great loyalty in his employees. Eddie says nothing happens fast in Indonesia so he expected that to be the case with AtozPay as well but he was pleasantly surprised at how efficient and hardworking the team is and credits Djunaedy for that. Eddie also said Djunaedy has lots of connections in the Indonesian Telecom world from previous jobs and, particularly in Indonesia, it’s who you know that counts.
Eddie is an unassuming and really friendly fellow who flew in from Singapore exclusively for my visit. He is passionate about what they are building. We spoke for an hour in the car on the way to the office. At the office, everyone was extremely friendly, They gave me a tour and then Eddie, the CTO Tommy, the General Manager of Marketing and Sales, Samyo Sumarmano, and I went into a conference room for the next 4 plus hours where they answered all my questions. It was a bit of information overload but I will try to put it all down here to the best of my ability, Most of this is from memory and my understanding of what was explained to me. Weyland nor AtozPay can be in no way held responsible for any mistakes in this document.
AtozPay has 65 employees. They have 12 software developers, an operations team that looked to be staffed by 5-7 people, and a sales team. Various other areas like finance etc... are staffed as well. The ops team has a set of real-time monitors on LCD screens in their office. I’ll provide pictures later once I describe the business so they have meaning. Their backend resides in AWS (Amazon Web Services) and takes advantage of all AWS has to offer such auto-scaling and load balancing. It’s the way I would have done it. They do have a server rack in one room that contains a database backup and a GSM server (the purpose of which I will describe later). I’m not sure why that have a database backup on site and don’t just back up in the amazon cloud. I meant to ask but information was coming at me fast.
They have another suite of offices they are just setting up for a new app called AtoZGo which I will describe a bit later.
AtozPay’s main source of revenue is buying discount phone credits from the many telcos in Indonesia. I can’t remember the exact number but there are a bunch of them. It’s automated and they have an algorithm that goes out and finds the best deals and buys them. Phone credits are like a digital currency really. They get bulk discounts or discounts because the credits are near expiry. AtozPay turns them over so fast so expiry is not an issue. They sell these credits back to their customers (top up) at full price at various shops. The users can then use their credits to buy things. The shops that sell credits are called agents. Shops that accept credits are called merchants. A shop can be both. AtozPay makes a 2.5 to 3% (in some cases as much as 5%) margin on these credits. Because of limited capital they have to risk manage their inventory of credits. Eddie says they turn over credits 7 times a month. He thinks with double the inventory they could turn them over 15 times. For example, they put 1 million into the system to purchase and distribute mobile credits. Every 3 days they collect back from the agents the money for all the credits they have sold and put the funds back into the system to repurchase the credits and distribute to agents and sell to users, This happens 7 times a month.
The onsite GSM server I believe is there so that they can make up any short falls in inventory of credits directly from the telcos.
They currently have about 150K users, and a subscriber growth rate of 20% per quarter. They have 14,000 merchants/agents and do 12,000 to 14,000 transactions per day. Rate of transactions is increasing by 20% per month. They are looking to have 50,000 merchants by the end of the year. The benefit to the merchant is fairly obvious: online selling, digital purchase/e-commerce, receive a transaction fee.
The incredible thing to note here is that all of this growth is happening without a marketing budget. AtozPay relies on a bunch of hard charging sales guys riding around on motorcycles signing up merchants and agents. The best salesman of the year wins a motorcycle. Once signed up they may hang an AtozPay banner at the shop but that’s the extent of it. They will also put a QR code display in the shop to speed up transactions. Pretty slick. These same sales guys go collect the money taken in by the agents for the credits they sell users (after the agents take their cut). The salesman goes to the nearest ATM and deposits the money. These sales people are targeting mom and pop stores which I think have a higher probability of having customers with no bank account. A large percentage of the population do not have bank accounts and therefore no access to e-commerce/digital markets. Almost everyone has a cell phone. AtozPay provides these folks access the digital world. However people with bank accounts may find AtozPay to be an easy, efficient cashless experience and adopt it as well. Especially if eventually you can top up directly from your bank account.
Other near term developments:
A government subsidized T1 line provider called Finnet (think internet backbone stuff) approached AtozPay on the reputation of their sales force. Apparently Finnet is not very successful marketing to merchants and asked AtozPay for help. The end result is a network of 7000 Petrol stations and 13400 Alphmarts (7-11 of Indonesia) all accepting AtozPay and 80,000 ATMs where users can top up their credits. I understood that this was about ready to roll out. AtozPay will charge a transaction fee and of course realize more revenue from increase in credit turnover. The thinking is to use Finnet for getting large store chains and franchises to use AtozPay and continue to use the sales force to sell to Mom and Pop merchants.
A deal with REX, a courier service, to accept AtozPay credits for delivery payment and all courier drop stations becoming agents. Currently many deliveries are COD transactions and the delivery people are carrying around too much cash. AtozPay solves this problem and gets a bunch more top up locations. This particular courier does 10000 deliveries per day. This one I believe is ready to go.
AtoZGo a new app for food delivery. The idea is to have a kiosk in an office building where food is delivered from surrounding stalls and restaurants that are within walking distance. Prevents workers in air conditioned offices from going out into the heat to buy lunch. Current markup for food delivered via vehicle is 20-30%. AtozPay would get 10% of the price of the food and eliminate the normal markup. The delivery person would get a cut. They have a restaurant chain with 150 stores signed up but they want to sell to Mom and Pop stalls and other restaurants as well. Of course the new app will accept AtozPay for payment and be integrated.
Indonesia has thousands of mosques and Eddie has a plan to approach the Imams and convince them to use AtozPay for donations. Imagine every Iman telling his congregation to download the app to tithe. This is a devout country. 70% of the television programming is religious. If the Imam says download and use this app, they will download and use it. And not just in the mosque.
They are targeting schools to use AtozPay for school fees.
Eddie says they want to raise money to support growth. Money would be used to expand sales force, create a marketing budget, scale out engineering, and increase credit inventory, With funding they could also clone the system and roll it out in other Asian countries.
Other random items of note:
Users can pay all their utilities with the App, train tickets can be purchased. AtozPay provides the capability to top up other popular e-wallets. They want to be an aggregator not a competitor.
Adding location based marketing in the future. Based on GPS position, paid ads will come up for merchants nearby who accept AtozPay.
There is no AtozPay iPhone app but one is planned. Apple’s footprint in Asia is not nearly as large as Android’s. Android phones are cheaper.
Some of the work they have done with AtozPay and charitable organizations has given them positive visibility with elected officials.
It is my understanding that 49% of AtozPay shares went out in the dividend, Djunaedy and senior staff at AtozPay have another 20%. Weland Tech has an option to aquire the other 31% for a nominal fee.
Eddie’s characterization was that this is a rocket ship ready to take off. Eddie says on fundamentals he thinks the share price of WEYL should be $3-$5
They want to build the business and sell it. Eddie stated that bluntly enough
Eddie demonstrated Create App as well and showed me some applications that were created by it. There are somewhere around 40 components that you can drag, drop and configure. In a couple hours you can create a rich application and publish it to both the Apple Store and Google Play. It’s quite good and I’m not sure why it isn’t being marketed everywhere. AtozPay will soon become one of the configurable components. They have also cloned and licensed it for use within organizations or specific markets.
In summary, there is value here. There is a dynamic team in place developing and improving the software, good leadership and a strong sales force. It looks poised for growth and will clearly very soon become an attractive buyout target in my opinion. And credit to Weyland for their hospitality and transparency.
Operations Room Real-time Monitors
Top: Map depicting merchant and agent locations
Bottom: Tracking of Sales Force
Credit Aquisition from various telecoms
I believe this shows transactions and top twenty selling agents
Transaction Rupia Amount and other transaction metrics
I think this is credit aquisition stuff - not sure
Credit Products and Credit Supplier data I think. I was pretty punchy by then
Real-time Transaction data
I’m the ugly white boy. Eddie to my right. The guy is a real sweetheart. Then Samyo and Tommy. Both great guys and all MMA fans like myself!
