03/07/2023

Iamfire (AQSE:FIRE)

Share Price: 1.95p

Market Cap: £6.73m

Introduction:

Rolling out any new concept in business can be a tough, expensive, and take much longer to execute that expected. After all, even Amazon’s journey to being a multinational retail and technology company was not linear, and proceeded in fits and starts.

But in Iamfire’s main investment, WeShop, a social commerce platform, it can be seen that the prospect of being a leader in the reward sites, community owned ecommerce, is now a real possibility. This is especially so given the way that as announced last month, WeShop, is now poised to going into the next phase of the company: digital marketing and national advertising. This ccomes at a time when existing retailers are viewing the shoppable social network as a driver for existing to boost market share. This point has been underlined by the way that John Lewis, Argos, Habitat, Sports Direct, TicketMaster, booking.com and Skyscanner have all recently joined WeShop. This underlines how important the customer reviews are in the purchase process, along with them being rewarded for the purchase with shares in WeShop itself.

WeShop Update: June 2023

Just when a tech company turns the corner is always something of a moveable feast, especially if it is in a novel area. Social shopping, rewards ecommerce, WeShop can be looked at in different ways, but it is all under the tech banner. The inflection point appears to have come last month. This coincidentally happened in the wake of not only the company’s update, but also being a principal partner of Soccer Aid for Unicef, an event which raised nearly £15m. Soccer Aid is likely to be the start of WeShop ramping up its profile, something which is the final piece of the jigsaw in terms of scaling the business up.

What is interesting though, is the way that user downloads for the WeShop platform as at 31 May 2023 were over 230,000. This is up from 43,000 last reported by FIRE on 21 November 2022, so it would appear that the near 5x jump is happening organically. Total purchases through the platform now total over 180,000 with an annualised gross merchandise value of £33.4m as at the end of May 2023. This compares to £27.9m for March 2023. The total GMV to date is £22.1m. One would assume that the more existing players in the form of High Street names join the platform, the greater the momentum in terms of downloads, engagement and sales will be. As things stand though, the metrics are all rising well, at a tough time in the economic cycle. Indeed, one might say that ecommerce sites that reward users find a downturn a very good time to operate.

Iamfire’s Share of WeShop

The good news for Iamfire, whose major investment is in WeShop, is that after the latest six figure fundraise at £4.76 per share, WeShop is valued at c. £130m. This gives FIRE a see-through holding of £22.5m as compared to the present market cap of £6.73m. Of course, in present stock market conditions it is the case that under- valuation is the name of the game. However, the opportunity to get into a WeShop via Iamfire, just after all the heavy-lifting has been done to establish the platform – over £20m spent so far, does appear compelling at the present point.

This is especially given the way the company has had to endure cynicism from certain quarters, regarding the way that those on the platform are set to own up to 90% of it. The retort of course is that the 10% still owned by the company will still be a princely sum.

Summary:

In the week when Apple reached a $3trn market cap, we are reminded that not only is Silicon Valley a world leader, but is seemingly stretching its lead. It is therefore up to the likes of WeShop to perhaps try an ensure that the rest of the world, especially the UK, comes up with innovative tech ideas that could also provide outsized rewards. Iamfire’s investment in WeShop is already significant and successful in terms of see through value. We should be treated to further success over the rest of 2023.