When customers are more than happy to pay upwards of $5 for a cup of coffee in major Australian cities, it’s fair to say there’s a bit of money to be made in the market where tech company Rewardle (ASX: RXH) is taking a unique approach by investing in their customers.
Taking their Rewardle app which gamifies normal consumer behaviour by rewarding customers for repeat purchases, Rewardle sees the repeat nature of coffee purchases as an opportunity to increase its shareholder value.
Already partnering with more than 5,000 local businesses across Australia that offer their customers with rewards, Rewardle has picked out crowdsourced coffee review business Beanhunter as a venture opportunity.
Rewardle and Beanhunter intially commenced working together in 2019 before COVID-19 lockdowns destroyed the cafe industry during the pandemic. But with coffee lovers back on the streets and whittling away the day with extended caffeine breaks, the partnership has resumed.
Initially, Rewardale will upgrade the Beanhunter website and collect fees of $15,000 for the work. Ongoing fees of $5,000 per month will then be payable to grow the Beanhunter network where Rewardale will be issued Options to acquire 51% of the coffee business within 3 years at a $350,000 valuation.
“We’re excited to be commencing work with Beanhunter. In the short term, the services work will contribute 20% towards our professional services target in May and June, with a 10% ongoing contribution from July,” said Rewardle Founder and Chairman, Ruwan Weerasooriya.
“In the longer term, the work we’re doing to integrate Beanhunter’s content and services into our platform will allow us to leverage our resources to grow the value of Beanhunter and the value of our Options.”
So confident is Weerasooriya in the direction Rewardle can play in consumer engagement going forward, he has issued a $250,000 unsecured loan to the Company. The interest-free loan will provide working capital for Rewardale and takes his total loan facility to $1.25 million.
The partnership with Beanhunter is part of a wider strategy being employed by Rewardale to invest in 3rd parties where they are confident integration of Rewardale services can significantly improve the business, and its enterprise value.
The Company intends to build on this with its other opportunities to achieve the $50,000/month 3rd party services revenue target in coming months.
Following news of the updated Beanhunter partnership and interest-free Founder loan, RXH shares opened at $0.017 which represented a 21.4% increase on their previous $0.014 close.