DeClout's stock price surged after it acquired the mobile phone app software developer for Me-Chat, a popular social messaging app in Indonesia. Visual from Me-Chat corporate website
CHINA HAS WeChat and Indonesia has Me-Chat. Both are counterparts to popular smartphone messaging app WhatsApp, which boasts over 500 million monthly active users.
That is not to say WeChat and WhatsApp are not popular in Indonesia, but Me-Chat has found a following among mobile phones users in Indonesia by enabling users of low-end handphones to enjoy smartphone privileges.
Currently, only 16% of mobile phone users in Indonesia subscribe to 3G and 4G services.
Me-Chat and other apps for low-end or “feature” mobile phones is the brainchild of Max Interactive Technologies Ltd (Maxitech), a Hong Kong company which was acquired by SGX-Catalist listed DeClout Ltd on 30 May.
“Maxitech is a leading content and payment aggregator for feature phones,” said Mr Vesmond Wong, Chairman and Group CEO of DeClout. NextInsight file photoMaxitech’s proprietary mobile platform provides cloud-based applications and services that are a non-smartphone counterpart to Apple’s iTunes, with privileges previously available only on smartphones.
These value-added apps and services include music, games and payment services such as utility bills and popular chat applications.
The Indonesian feature mobile phone services market is largely untapped one.
Consumers in emerging economies often do not possess credit cards and Maxitech’s ability to facilitate micro-payments on feature mobile phones addresses real needs of a large number of mobile phone users there.
Specifically, the deal also included the acquisition of the following companies:
1) 39% in PT Max Interactives Techologies, which provides mobile applications and mobile billing services through its cloud-based application stores to mobile phone users in Indonesia.
2) 100% in Matrix Treasure, which provides mobile applications and mobile billing services through its tie-ups with content and payment aggregators to mobile phone users outside of Indonesia.
These companies will be restructured and held under DeClout's wholly-owned subsidiary Netipay, which will be developed into a mobile cloud platform and proprietary payment processing service provider.
Declout’s share price has surged by 11% over the past week to reach 29.5 cents after its Games Cloud services arm, Corous360, inked the S$4.72 million deal.
From 26.5 cents on 30 May, DeClout's stock price has surged over 11% to reach 29.5 cents on Monday 9 June 2014 in just one week. Bloomberg data
The deal will be funded by S$1.35 million in cash plus the issue of 6,445,313 DeClout shares (at 25.6 cents apiece) and 520,000 new Corous360 shares (at S$3.30 apiece).
Maxitech has established access to more than 10 mobile device manufacturers and a network of mobile handset integrators to pre-install its mobile app store in over 50 million handsets globally.
In Indonesia alone, it already has 3.9 million registered users on its payment platform and 700,000 paying users as of 31 December 2013.
Maxitech’s payment platform supports more than 2 million transactions a month, with an average transaction value of US$0.10.
The M&A deal enables Corous360 to offer a direct payment channel to about 285 million mobile phone users in Indonesia without the need to enter into multiple contracts with local telecoms service providers.
This latest deal is within weeks of DeClout announcing plans to invest in UK refurbished PC solutions provider Tinglobal, and Malaysian IT infrastructure services provider Verity Solutions.
The acquisition of Tinglobal shares was completed on 8 May while the acquisition of Verity Solutions was completed on 2 June.
There’s smart money behind DeClout’s Games Cloud platform: UOB Venture Management is behind the funding for Corous360, having invested S$2 million to fuel its expansion plans in Southeast Asia.
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