Despite many investors fleeing the industry, Buy-Now-Pay-Later (BNPL) buff IOUpay (ASX: IOU) is doubling down on its strategic plan to pursue large telcos and corporates in South-East Asia via a Marketing Collaboration Agreement (MCA) signed today with the Bank Simpanan Nasional (BSN) to promote the Company’s ‘myIOU’ product across Malaysia.
As part of IOUpay’s strategic growth plan, the Company aims to collaborate with banks and non-bank financial institutions to leverage their subscriber base and build active communities and brand awareness. This is where today’s news comes in; BSN is a state-owned enterprise that the Government of Malaysia operates, and IOU is nurturing a relationship to access BSN’s existing 6.5 million card users.
The campaign will commence on 1 October 2022 for six months and will see promotions and advertising directed across the consumer and merchant networks of both BSN and IOUpay. The intended audience will be high credit quality bank customers and existing card users – in particular, the campaign will target customers pre-qualified by IOUpay with direct marketing promotions.
Under this campaign, BSN cardholders will be encouraged to utilise the Company’s ‘myIOU’ BNPL service, where they can purchase an item or service and pay through an IOUpay payment plan. To encourage take-up amongst customers, the Company will reward BSN card holders who download and utilise the service with extra benefits and promotional offers.
As outlined in the business’s fourth quarter cash-flow report dated 30 June 2022, the Company has burned through nearly $24 million in cash in its pursuit of expansion and a further $21 million via operating activities. Revenue was clocked in at $8.3 million, gaining 16.9% year-over-year (YoY). But on the other hand, the Company’s net loss came in at $9.6 million, increasing 100.8% YoY.
If you know anything about the BNPL industry, after booming and becoming a buzzword a few years ago, it has been under significant pressure more recently, with IOUpay no exception. The vast marketing and advertising spend highlights the Company’s fixation on continuing to find growth within a sector that has seen many of the big players either snatched up via mergers and acquisitions or squeezed out of the market altogether; either way, IOUpay seems immovable for the moment as their obsession with overcoming the turmoil seems to be cemented.
Erasing more than 90% of stock value since its all-time highs of $0.85 in February 2021, IOU shares were butchered during the BNPL slump, now resting at $0.07 at the time of writing. The same narrative has occurred among big player Zip Co (ASX: ZIP), whose shares have been obliterated by 94% from the all-time high of $14.53 to the most recent all-time low of $0.44 in June 2022.
Trading Desk Assistant at Emerald Financial
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