Philippine-listed tech startup Xurpas Inc has made its second, and largest acquisition so far since its initial public offering (IPO) debut last December, by buying a 51 per cent controlling stake in local tech firm Storm Flex Systems Inc for P189.6 million ($4.3 million).
Xurpas informed the stock exchange on Friday that the deal with Storm was completed on February 26.
Catering to employees across companies, Storm is the developer of a proprietary platform that allows its customer employees to exchange their current employee benefits and transform them into a wide range of products and services.
Storm’s total number of client employees now stands at 15000 and the company aims to increase this figure to 30000 this year, using the money it raised from its transaction with Xurpas. It plans to further accelerate its local, five-fold revenue growth (from 2013 to 2014), and branch out to other markets in Southeast Asia.
Xurpas president and CEO Nix Nolledo said the acquisition of Storm signals their company’s expansion into an entirely new distribution network, and into the selling of physical goods and services.
Xurpas is a mobile content maker with product categories including, casual games, mobile stickers, messaging, among others.
Nolledo cited that Xurpas considers Storm as one of its great inroads to regional expansion, noting the tech firm has a sound revenue generation model, which is both unique and exportable to other markets.
“At Xurpas, we have always said our business is simple, we tap networks which allow us to efficiently reach potential users, and we create or acquire the best products to sell to these users. Until today, we have been distributing digital products to users on mobile telcos’ networks,” Nolledo said. “And because Storm’s clients are able to provide their employees with wider range of benefits, it is yet another example of how technology can provide companies an ‘unfair advantage’ in the most unlikely areas such as employee attraction and retention.”
Storm’s flex benefits system ranges from gadgets and dining to a private carpool system, doctor consultations on demand, all the way to donations for charitable causes. Its client employees are said to be happier and more productive with their power of choice; while employers get substantial gains in their ability to attract, retain, and excite people.
Since its inception two years ago, Storm has earned employee clients from local leading conglomerates, BPOs, and fast-moving consumer goods or FMCG companies both in Manila and Metro Cebu.
“We are joining forces with Xurpas because we strongly believe that it is the ideal partner to help us realise our vision of building better employee lives through the provision of better benefits. We feel this partnership will allow us to achieve the next stages of growth and development in the region. There is a tremendous opportunity ahead of us,” said Storm CEO Peter Cauton.
Xurpas last December raised P1.37 billion ($30.4 million) in the local stock trade and immediately began is first regional expansion a few weeks later by acquiring a 21.7 per cent stake in Singapore tech company Altitude Games with shares worth P33 million ($740,800).
Nolledo recently said the company is planning business expansions in the region, including in countries like Bangladesh, Indonesia and Thailand.
Xurpas’ last traded price was at P11.24, down by 5.07 per cent or P0.60 to yesterday’s P11.84.