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Bango AGM – Shareholder questions

1) Can you talk about the recent deal with NTT data and the opportunity there? You announced a similar deal with TPAY a few months back, should we expect more of these types of deals going forward?

Anil Malhotra, CMO: “Bango has a very active, fast growing business in Asia, and we see the NTT Data partnership as valuable in extending our pan-Asian coverage beyond the current coverage Bango has secured directly over the years. NTT Data is a long standing, successful payments and data focused partner in the region, so the partnership enables us to open up the Asian market more quickly to Bango merchants, providing them with access to more paying customers, in more countries. The TPAY mobile relationship we announced in January was similar, addressing in that case, the Middle East and Africa. Like Africa in the case of TPAY mobile, Asia is a very diverse region with many different countries at varying stages of economic development. Each country has different operational challenges and market opportunities, so by working with somebody that is heavily investing in the region like NTT Data, we can open up the entire region much more rapidly to the benefit of our customers. Asia is one of the areas where online payment is spreading rapidly. There is a connected online population within so many different countries ripe for marketing of digital content and services, so this relationship will also help enrich the Bango data proposition alongside payments”.

2) Your annual report lists principal risks and uncertainties but does not mention anything about competition. Please could you outline the competition you face and detail what are you doing to mitigate any sales that could be lost to them?

Anil Malhotra, CMO: “The main alternative to companies that use Bango products and technology as their solution is doing it themselves – tech teams in large telecoms companies integrating with merchants directly – rather than any third-party competition. Something like 90% of payments by value go through legacy direct connections and longer standing investors will know, we have a strategy of persuading companies who are connected directly to big app stores/big merchants of the benefits of routing through Bango. This includes improved customers acquisition, better sales conversion and higher performance overall as a result of the data insights Bango gathers across the whole of the market, rather than just between one telco and a handful of merchants. Increasingly, Bango is successful in being chosen and we prove our success by using the data we have across the whole of our business to enable those partners to grow their revenues faster and by opening up new revenue streams in ways they couldn’t if they went directly, through their own bilateral arrangements.

For these reasons, the data driven commerce strategy means that Bango offers a better product than payment aggregators because we do more than act as a payment gateway pulling together different payment routes. As data becomes increasingly important to successfully monetizing customers, the Bango proposition has a clear and strong competitive advantage. As a result, we’ve found we’re winning much more business.

On the data side of the business, which is relatively new, competition is primarily traditional, demographic profiling as a way of acquiring new users. Bango is connecting the way merchants acquire users with the vastly improved revenue outcomes from those user acquisition activities so we remain confident that as the Bango proposition lands more clearly and more pervasively across the ad tech market, we will continue to win more business”.

3) Could Facebook decide to prevent Bango running campaigns on its site in the future? Are there other places where you run / can run these campaigns or are you reliant on Facebook? Is it correct that you are trialling Tiktok for campaigns?

Paul Larbey: CEO: “When we developed Bango Audiences, they were designed to be applied to any digital marketing platform that allows you to target that campaign at a list of users, making it very platform agnostic. One of the reasons we talk about Facebook so much, and the reason we started with Facebook, is that the bulk of the app developer advertising spend is with Facebook, somewhere between 60-70%. Given it has the lion’s share of the app developer marketing budget, it was absolutely the right place to start. However, we are agnostic and indeed, we are working with Tik Tok, as well as other platforms, to bring the power of Bango Audiences to businesses that market using those different platforms. It benefits those platforms too, as they are all competing for a share of the same advertising spend and they want as much of that spend as possible. So, if we can make a platform perform even better, deliver better results and a better return on that advertising spend, then clearly, they are going to attract more of the overall marketing spend”.

4) Facebook recently said it has increased its charges. Does that affect Bango? If so, does Bango have to cover this increased cost or are you able to pass the increase onto the developer?

Paul Larbey, CEO: “With our model, Facebook increasing their charges doesn’t impact Bango at all. The app developer pays to deliver their ad through Facebook and we are completely outside of that flow. What we do is charge the app developer for use of the Audience to help them get a better return from their marketing campaign. The fact that prices are increasing actually means that app developer marketing teams are looking for an even higher return on their marketing spend. There is therefore more benefit in using Bango Audiences to target paying users through our purchase behavior targeting to find those really valuable 5% of users who generate 80% of their revenue”.

5) I am concerned about the regulatory rules regarding payment data. It seems that selling segments of data relating to people’s payments is a grey area. It may be within the rules currently, but will it remain so? Please could you explain how it is within the rules now and your thoughts on whether this might change.

Anil Malhotra, CMO: “Initially, I will explain how Bango obtains the data is uses to create these payment audiences. First of all, consent is critical to this and one of the things that regulations like GDPR (and in the US CCPA) does is it clarifies and encodes the rules governing consumer consent and a consumer’s right to see what data is being held/used on their behalf and indeed to erase data if they wish to. As a result, what was a grey area in the years leading up to 2018, when GDPR took effect, is now much clearer. Everybody knows where they stand, data collectors know where they stand, data processors know where they stand and, critically, consumers know where they stand in terms of their rights. Everything we do with data is built and designed to comply with those regulations across the world. We ensure all consents are obtained by the primary data collector, which is usually the person processing the payments who has the direct billing relationship with the consumer, so there is a consent control there.

The second thing we do with all the data we receive is anonymize and encrypt it. We present it in a form that means it is never actually passed onto or sold to a third party. Sometimes there can be a misconception about “data selling”, Bango never sells data to a third party, the data never leaves Bango’s control. Although, as it’s been anonymized and encrypted, if it did end up in someone else’s hands, there is nothing they could do with it. The third thing that happens is that when consumers are targeted with adverts on a platform, say like Facebook, the marketing platform itself manages consent with regard to customers seeing advertisements. So, it is quite possible the consumer has given consent to have their payment data used so they can see interesting products, offers and other services that align with their payment interests. Bango manages the process of handling the data, but Facebook knows if an individual doesn’t want to see any advertisements, in which case they won’t be shown any. There are therefore three levels at which data is secured and we, of course, ensure we are compliant with data regulations”.

6) What plans does Matt Garner have for Bango bearing in mind his previous experience of dual listing a company, and the acquisition and integration of 5 companies?

Matt Garner, CFO: “My main reason for joining Bango is the exciting opportunity the business presents and the strength of the team we have here which were good attractions. In terms of the market area, although our organic growth continues to drive our top line revenues, my experience in M&A across Asia, Europe and America is useful as we continue to grow. In respect of the listings, we have no plans to dual list or to move to another listing”.

7) Do you have any difficulty in recruiting new staff – your website lists a number of vacancies which appear to have been there for a number of months?

Paul Larbey, CEO: “Effective hiring is critical to Bango. Making sure we hire people who not only have the right skills but also fit into the culture and have the right attitude to help us grow, and continue the growth we have delivered over the past few years, is key. So far this year, we have hired around 17 or 18 people most of whom have joined or will join in the coming weeks. Some of the roles you see on the website are for positions with multiple vacancies and we keep these live on an almost permanent basis, to ensure people with the right skills can apply to Bango now. This applies to engineering and sales roles in particular, as those are the areas we are always looking to expand. We want to make sure that if good people come along, they see and apply for the role and we can bring them into Bango, as bringing in good people is important to deliver our ambitions”.

8) What is your greatest worry for the business?

Ray Anderson, Executive Chairman: “Bango is 21 years old, so there is nothing that would keep me awake at night. Over the years Bango has built a very strong and resilient platform. We have great customers, long-term relationships and are generating cash. The upside potential and scalability as the virtuous circle strategy delivers more data and more value for customers is clear. It could therefore be the case that someone may see the value of Bango, beyond the current market value, which could cause a predator to try to seize control of the Bango opportunity by paying a low premium on the existing share price. I don’t think that is likely to be the case because we have good relationships with our largest shareholders, they see and share the future path for Bango. Bango also benefits from powerful partners like NHN who has a significant stake and who sees our longer-term benefit to them as a business, and also sees its value as an independent business. I am therefore confident we are well protected against this. Forums like this AGM are key to make sure we are always talking to our investors about the business, what the future holds and where we are likely to end up in the coming years”.

9) You are now minority owners of the Audiens business. Does this leave you at the mercy of NHN who are majority owners? Can they do what they like with this business, even if it was against Bango? What are your expectations for Audiens?

Ray Anderson, Executive Chairman: “Audiens is a business that is owned by NewDeep, which is the joint venture between NHN and Bango. Bango owns 40% and NHN owns 60%. NewDeep is taking the unique Audiens technology, and additional technology, expertise and relationships injected by Bango and NHN, to deliver a unique ability to deploy world class data science particularly focused on the growth of Shopify as a commerce platform. That business is doing well. When we formed the joint venture, there was a lot of discussion and planning to ensure it would be a success. We established a robust shareholder agreement, a business plan and a governance structure. NewDeep has four board members; two from Bango and two from NHN and we are aligned with our business plan. We have a common interest in making this business successful independently. NHN is particularly interested in growing the business outside South Korea. Bango is keen to see the technology it has injected into Audiens prosper. Both have a shared goal to ensure that the independent business thrives. Bango and NHN are injecting different qualities and capabilities into the business, we complement each other in what we inject, it is a strong relationship that will endure though our joint commitment driving NewDeep forward”.

10) Why did Bango receive so many votes against the approval of the accounts?

Matt Garner, CFO: “Three shareholders voted against resolution 1, one of which was a large holder who told us they vote according to the guidance they receive from a proxy service. Votes cast may therefore not represent the opinions of those shareholders. Proxy services expressly prohibit sharing any of their report contents, so we are unable to provide more detail. However, Bango is always keen to operate transparently and engage with shareholders on all matters and we were delighted with the strong support shown by shareholders for all resolutions”.

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