A growing US-based fintech business with revenues of $30m, which has developed point of sale lending products to meet immediate demand for convenient, flexible and transparent consumer lending. We performed an IP valuation for core IP that had been transferred from another entity, however now 2 years on, the IP had been further developed and was underpinning a new product and new business model and strategy.
The Company invested significantly in improvements to its IP portfolio over the previous two years and pivoted its business model to meet changing consumer preferences. Management was keen to know how this investment translated into IP value as the financial statements had captured this ‘investment’ only as expenses, primarily wages and marketing.
This is a unique IP portfolio as the Company has developed sophisticated fintech that we would expect to see being licensed in a SaaS model, but is currently being used internally as part of business processes. Our information discovery process found evidence that the Company’s use of its proprietary software and algorithms could be directly mapped to both increase in revenue and improvement in margins – this IP was delivering a competitive advantage. We extended our industry analysis to include all the markets that impacted the Company’s future cash flows, including financial services, fintech, their target retail sectors and the wider growth and outlook for ecommerce, as the Company has developed additional technology for ecommerce which is proving to be a key differentiator from competitors.
We delivered an IP valuation which demonstrated the uplift in IP value from the Company’s investment in IP. Our detailed commentary on the key IP assets provided an essential narrative which will help the Company in its next stage of expansion – the Company’s use of technology is relatively unique in this market and Management can now confidently articulate the key IP assets that are helping to secure the Company’s future cash flows, which will be crucial for future fundraising. This business recognized its reliance on IP, actively invested in IP and yet the investment is essentially missing from the financial statements. Management now has transparency over the IP that is critical and valuable and can develop a strategy to ensure it is protecting the IP, thus protecting future cash flows. The Company then engaged us to advise on its IP strategy as Management further develop their brand and establish an internal trade secret policy.
Critical IP Assets Valued: Software, Brands, Potential Trade Secrets & Key Organizational Knowledge
