This agreement comes hot on the heels of the successful completion of the Foundation Stage of the Digital Services Delivery (DSD) initiative, which saw Spenda receive $443,000, coupled with $1.3 million in initial development fees for the upcoming commercial launch.
Ongoing Partnership for Success
Spenda and Capricorn have been working together on the DSD initiate for some time, in May Spenda announced it was selected as Capricorn’s preferred supplier to deliver the first phase of the DSD initiative, announcing completion in August 2023.
Spenda will continue to work closely with Capricorn as it customises payment infrastructure for Capricorn over the next six months, with the onboarding of the network expected in mid 2024.
The DSD initiative is a strategic project that upgrades the payments infrastructure to Capricorn’s Member and preferred Supplier network, consisting of over 26,000 Members and more than 2,000 preferred Suppliers, to ultimately increase productivity and create efficiencies for all.
The new payments solution will enable all Capricorn Members to access eCommerce payment solutions, that are powered by Spenda.
Substantial Financial Reward
The 10 year service agreement is set to generate substantial income for Spenda through upfront and reoccurring revenue streams.
Spenda will generate at least $2 million in revenue from software and services in calendar year 2024 alone, offering significant upside potential for the Company.
Software revenues are expected to significantly exceed the minimum $100,000 monthly revenue as Spenda’s software is rolled out to Capricorn’s 26,000 Members.
Both Spenda and Capricorn have additionally agreed to a 5+5 year option, which if exercised, would extend the agreement to a 20-year term.
The service agreement lays a foundation for both parties to build further joint initiatives that can improve the digitisation of the automotive industry over a decades long horizon.
Capricorn’s (Automotive) CEO Bradley Gannon commented on the partnership.
“This long-term agreement with Spenda is the end result of a comprehensive project to trial the new digital payments infrastructure,” he said.
“We now have full confidence to proceed with the commercial launch to our Member network in 2024 which will improve the flow of funds through the large network of buyers and suppliers in the automotive industry”
“We expect the Digital Services Delivery initiative and new payments infrastructure will deliver substantial value to our Member network for decades into the future.”
Spenda’s Chief Executive Officer and Managing Director, Adrian Floate, added:
“We are delighted to partner with Capricorn over the long term under this Master Services and License Agreement, which is an important milestone for both Spenda and Capricorn,” he said.
“We are working towards the onboarding of customers in 2H FY24 and we expect our revenues to scale significantly over the years ahead as the solutions are rolled out to the Capricorn Member network.”
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