Logiq Inc. (LGIQ:OTCQX; LGIQ:NEO), the e-commerce customer acquisition solutions company comprising AppLogiq, a mobile app provider, and DataLogiq, an advertising technology platform, recently announced its planned separation into two publicly traded companies on Dec. 30, 2021.
Potential acquisitions are on the table to create rollups in AdTech and Mobile E-Commerce, respectively, according to Brent Suen, president and executive chairman.
AppLogiq, a mobile e-commerce solutions provider, enables small businesses to create a mobile app for their business. This is growing rapidly in developing countries such as Indonesia and Laos where mobile devices are ubiquitous versus desktop and laptop devices in the U.S.
DataLogiq provides customer acquisition solutions for small businesses, including advertising technology, marketing technology, and lead generation in North America, primarily the United States.
On June 30, 2022, the company will distribute to those shareholders who were of record as of Dec. 30, 2021, “pretty close to 1:1 — where shareholders will see that the implied value of the spinoff is equal to our entire market cap now — just on the AppLogiq piece. On the DataLogiq side, based on the growth of the business and the comparable market valuations, it should be equal to $180-$250 million in combined value to shareholders or $6-10 per share,” Suen said.
By adding to its scale through rollups, the management expects each of the two companies to qualify for NASDAQ listing by the end of 2022, he said. In the new formulation, AppLogiq will be known as GoLogiq, while Logiq Inc. will house the DataLogiq business. “We have acquired a shell that is fully reporting to the SEC … with no assets or liabilities, to house the spinoff.” The company will put the emerging assets/fintech assets into the shell and issue shares to the public, he explained. “Our goal is to uplist or there is another path where the company …. would go directly to IPO on the NASDAQ, possibly within the next 12 months.” Suen said.
“We try to level the playing field so that small businesses that have to compete against Amazon and Walmart and Target etc., have the same tools available to them to effectively compete on the advertising and marketing side. It is very much of a little person versus big, David vs. Goliath theme.”
—Logiq Inc. President and Executive Chairman Brent Suen
The pace of acquisition talks is promising with the company seeking to create rollups in both the advertising tech space for Logiq and mobile e-commerce solutions rollup for AppLogiq.
“We are currently in conversations with 31 potential acquisition targets for DataLogiq and seven on the AppLogiq side,” he said.
The company had filed an S3 with the Securities and Exchange Commission (SEC) in late September to signal its intent to raise up to $40 million, which it said was expected to be used for both companies to acquire and roll up other providers in what is an emerging and fast-growing landscape.
“We would hope to do acquisitions with stock as well as cash … on a case-by-case basis. We are looking to make acquisitions that are accretive … well over half (of the 31) are profitable right now. We are looking to acquire revenues and earnings. Others are cash-flow positive,” Suen said.
Datalogiq’s business is concentrated in the U.S., where over 53% of consumer online buying is on the top five platforms: Target, Amazon, eBay, Alibaba, and Walmart. The company intends its products and services to give small and medium businesses similar tools to sell more: lead generation, online marketing and advertising technology, “AdTech, MarkTech and LeadGen.”
“We try to level the playing field so that small businesses that have to compete against Amazon and Walmart and Target etc., have the same tools available to them to effectively compete on the advertising and marketing side,” Suen said. “It is very much of a little person versus big, David vs. Goliath theme.”
The Company taps advertising and marketing agencies who service small business in an efficient sales process to help small businesses level the playing field to compete against the larger players.
“The path that we're following is going to ad agencies that are that are providing small budget services for small businesses. By partnering with them and giving them access to the platform, they in turn, give that access to their small businesses,” Suen said. “So instead of having thousands of salespeople, we have a dozen who go to ad agencies that cater to small businesses.”
While this sector is not being sought by SPACs or major players in the hedge fund world, many of the smaller investment banks are looking for players in the space.
AppLogiq’s business taps into the digital landscape in emerging markets which is smartphone based. Micro and small businesses fulfill their business needs on their phones as opposed to desktop and laptop computers, not as widely used in emerging markets. AppLogiq enables creating an online presence, fulfilling their wants and needs. That includes offering products, accessing supplies and inventory.
Founded in Singapore under a different name, AppLogiq now has a significant headcount of senior-level people on the ground in the emerging markets, which they point to as a strength to digital service providers that want to gain traction there. The U.S.-based teams of their competitors tend to be younger and, during COVID, less likely to be on the ground in the region.
Indonesia is currently the top emerging market as a region. The Company has a 40-person team in Indonesia; three in Ho Chi Minh City, Vietnam; four in Singapore; and five in Myanmar. “We do have significant people there who are both senior-level management and operators.”
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