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Tech startup Rezolve gearing up to trade on Nasdaq

By Carreen Maloney

18:33, 17 December 2021

Woman scanning product with mobile phone
Rezolve’s mobile technology enables companies to connect directly to customers - Photo: Shutterstock

A UK company that is resolved to change the way companies connect and interact with their customers is on track to become publicly traded on Nasdaq by merging with a special purpose acquisition company.

London-based tech start-up Rezolve created a platform that embeds code in apps to trigger mobile phones to “wake up” and receive advertisements and promotions.

On 17 December, Rezolve announced it has entered into a definitive business combination agreement with Armada Acquisition Corporation I, which currently trades under ticker AACI.

The boards of directors for both Rezolve and Armada have unanimously approved the deal. Assuming there are no redemptions by Armada’s stockholders, the newly combined company will receive $150m (£113m) from Armada’s trust account plus $40m in additional proceeds from investors.

The stock is expected to trade under the ticker ZONE on Nasdaq.

Beam me up, Rezolve

Rezolve works with merchants and manufacturers that have their own mobile apps. Using Rezolve technology, the companies set up geozones that interact with customers who are nearby, sending out beacons that beam information to cell phones.

Rezolve’s technology is capable of embedding purchase codes into printed advertising materials such as posters and flyers, and on product labels, allowing a customer to make a purchase by scanning the material with their smart phone. It can also create audio watermarks for broadcast and streaming media.

For example, a person reading a cereal box could see this activity go to a whole new level if Rezolve technology is adopted, said CEO Dan Wagner in a recorded investor presentation. Wagner founded the company in 2016.

“When you’re sitting at your breakfast table, you can interact with your cornflakes. By doing so, the cornflake manufacturer will learn about you, will be able to offer you incentives, will be able to encourage you to purchase them again.”

Two pieces of code

Rezolve estimates its total revenues for 2021 will be $82m, with most of it – $61m – coming from the Chinese financial services corporation UnionPay. Its projected EBITDA is a loss of $26m. Rezolve’s services are currently being used by 182,000 merchants.

In the presentation, Wagner discussed the technology behind the platform. The programme is made up of a code that can be added to any app used by a smart phone.

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“And what that little bit of code does is it allows the phone to wake up to what we call triggers,” he said.

In India, Rezolve has a partnership with MobiKwik, a mobile payment wallet similar to PayPal in the US.

“They are updating their app in 2022 to include Rezolve technology,” Wagner said. “Suddenly, over 100 million Indian consumers will have Rezolve technology on their app without even knowing that it has been added. And when they next engage with the merchant or they next walk into a geozone, they’ll get notifications and be able to transact as part of their experience with MobiKwik.”

Winner takes all

Wagner touched on the Covid-19 pandemic as an era in which retailers are struggling to establish traditional brick-and-mortar connections with customers because a significant portion of consumer spending has gone online due to safety concerns around in-person activities.

“A lot of our revenue is coming from geozones, because that’s a very important driver for physical locations and driving traffic into physical store,” he said.

Rezolve aims to become ubiquitous, Wagner added.

“We have a winner-takes-all strategy, because there can be only one type of technology like this that permeates across everybody’s applications. So, for example, if I’m flipping through a magazine and I see an ad, I don’t want to have to determine which technology will engage with that ad.”

Two revenue streams

Rezolve’s revenue comes from two streams. First, it charges the app partner for using its technology – such as creating a geozone for a merchant, inserting information into an image or audio file, or activating a beacon.

The second stream of income comes from fees it earns from each transaction it aids with its technology, which is typically 1% of the transaction value, or 40 cents per engagement that enhances the customer-merchant relationship, such as booking an appointment or requesting a brochure.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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