Way2VAT’s first half shows why global companies like Tiktok and MasterCard are interested in its technology

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VAT tech company Way2VAT achieved a solid half, bringing in new enterprise customers like TikTok, as well as introducing the world’s first Smart Spend Debit MasterCard.

Value Added Tax (VAT) fintech Way2VAT (ASX:W2V) accelerated its growth trajectory in the first half of FY22 by signing platform partners, enterprise customers and introducing the first Smart Spend Debit MasterCard to the world.

For the period, trading volume increased 8% on pcp to $5.43 million. Revenue, however, was down 25% to $0.525 million on pcp, primarily due to an increase in the accounts payable ratio and local VAT claims which attract lower commissions.

Half-year revenue was also impacted by international VAT receivables, which are still recovering from pre-COVID levels.

The number of small and medium-sized enterprises (SME) customers of Way2VAT increased by 21%, from 700 to 850 during the semester, thanks to both indirect sales and sales from platform partners.

The company also signed 15 new clients from multinational companies, including TikTok, Playmobil and Artsana Group across a wide range of industries.

These signatures brought W2V’s enterprise customer base to 215, a 25% increase over last year.

In addition, Way2VAT now has 6 partner platforms after entering into a partnership with Circula, the specialist in the DACH region and the largest provider of expense management solutions in Germany.

One of the biggest highlights of the semester was the launch of Smart Spend Debit MasterCard – the world’s first spend card automating VAT/GST reporting for the SMB and corporate market in partnership with Railsr and Mastercard.

On the balance sheet side, W2V is well funded, with a cash balance of $1.461 million as of June 30.

This comes after the cap was raised to $1.090 million through an oversubscribed equity offering that garnered strong support from institutional and high-profile investors.

Way2VAT also received a $625,000 grant from the Israel Innovation Authority (IIA).

This grant is intended to support R&D and initial marketing and commercialization of the Smart Spend Debit MasterCard.

W2V CEO Amos Simantov expects to see a steady return to solid revenue growth in the second half of 2022 and throughout 2023 as outbound travel returns to more normal levels, with higher commission rates.

Launch of the Smart Spend Debit MasterCard

In partnership with Railsbank (now Railsr), Way2VAT launched the Smart Spend Debit MasterCard in April this year.

It is the world’s first expense card for the SMB and corporate market that fully automates end-to-end VAT/GST reporting.

The demand for using debit cards is increasing globally. In Europe last year, cards with a debt feature increased by 42.7 million to 813.5 million. Around seven out of ten cards issued in Europe now include a debit function, as consumers appreciate the flexibility and ease of paying by debit.

Way2VAT’s Smart Spend Card also allows businesses to submit expense receipts and enter invoices through its proprietary technology platform.

The new technology captures the receipt and processes it through to payment, and can automatically analyze, reconcile, sort and submit documentation to foreign tax authorities.

Using the card, employees can simply spend the amounts allocated to them and VAT/GST will be automatically submitted with all relevant administration completed.

“The launch and initial rollout of our first Smart Spend MasterCard debit card, designed to meet customer demand for such a card for the SMB and corporate market, fully automates end-to-end VAT/GST reporting. ultimately, will lead to strong sales in its own right and allows us to sell to our existing SMB and enterprise customers,” Simantov said.

Through the card, Way2VAT will generate revenue through a software as a service (SaaS) model, generating new annualized revenue streams for the business.

The card is currently being rolled out to customers initially in the aviation, security, automotive and technology industries, as these industries showcase the wide range of capabilities and different uses the card can offer.

Corporate clients and partnerships

Over the past six months, Way2VAT has signed new agreements with major multinational corporate customers, including TikTok, the world’s leading short video hosting service with 1.4 billion users.

TikTok will initially use Way2VAT’s platform for around 7,000 of its employees in Europe, the UK and Asia-Pacific, with potential to expand into other markets.

Other major customers signed during the semester include Ariston Group, an Italian global leader in energy-efficient thermal products with more than 7,700 employees in 42 countries.

Playmobil, Germany’s largest toymaker and one of the world’s top 30 entertainment and toy manufacturers, has also signed with Way2VAT.

In April, Way2VAT increased its key partnerships to six after securing an agreement with Circula, Germany’s largest expense management solutions provider.

The partnership agreement allows Circula customers to use Way2VAT’s automated VAT claim and return solutions product for SMEs.

These partnerships and integrations with platforms such as Circula, Allocate, Elmo, Yokoy, Zoho and Xero allow Way2VAT to strengthen its presence as a leader in automated VAT recovery software for the SMB market.

In this segment, Way2VAT generates revenue through each successful VAT recovery transaction these partners process on the Way2VAT platform.

Product development and patents

During the semester, Way2VAT completed the integration with the Railsr BaaS (Bank as a Service) platform to support its Smart Spending Card users.

The Company has also filed several patents to advance and protect its technology.

The first patent application was for “Systems and methods for analyzing document images by aligning sets of document images on spreadsheets”.

This patent application describes a new method for automatically matching tabular expense report sheets and document image sets, eliminating the need for manual processing.

In addition, Way2VAT has also received a new patent from the United States Patent and Trademark Office for its application for “Systems and Methods for Document Image Analysis with Cardinal Graph Convolutional Networks”.

This patent will support technology enhancements for improved efficiency, speed and fraud detection, and advance Way2VAT’s platform as a leader in the VAT recovery market.

Outlook

Commenting on Way2VAT’s outlook, Simantov said:

“The trend of increased transaction volume will continue as domestic and international business and personal travel returns to more normal levels.

“Research and development remains essential, with the development of new products to meet the evolving needs of our customers.

“We look forward to the launch of a new product based on our patented AIA (Automated Invoice Analysis) technology which also incorporates the latest AI and computer vision technologies.

“This will strengthen our position at the forefront of the growing trend of companies looking to automate and digitize their tax and compliance processes.

“Our recent binding share sale agreement to acquire 100% of the Spanish company DevoluIVA has allowed us to enter the Spanish market.

“This will allow us to offer complementary domestic and foreign VAT and Accounts Payable services, and roll out the first MasterCard Smart Spend Debit card through an established national network and open doors to other countries in Latin America. with similar VAT and accounts payable structures.”

This article was developed in conjunction with Way2VAT, a Stockhead advertiser at the time of publication.

This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.

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