Activistic focuses hard on downloads and donations

In the UK this year a product called Hope Locker was launched by Proximity London. Hope Locker is a coin-operated changing room locker with a built-in micro donation opportunity for charities. It is a pretty clever idea and comes on the back of a rise in disruptive tech charity platforms.

One Australian listed company with growing reach into the UK and US markets is also disrupting traditional giving channels.

Founded in 2014, Activistic (ASX:ACU) began work on a new method of generating support for socially responsible and ethical causes.

The result of this work was a micro-donations payments platform that is accessible and cost effective and allows those who use it donate on a recurring basis with no need for bank or credit card details.

The technology effectively takes out the payments processors so that more money ends up in the pockets of those who need it most.

In 2015, Activistic launched two apps that are now gaining traction: Veterans Call (VC) and Ralli.

In the case of Veteran’s Call, a smartphone app for iOS and Android for both apps enables people to easily find, connect with and contribute in a meaningful way to leading veterans’ organisations.

Like any start-up, it has had hiccups and Activistic is currently working through its problems.

One question that has reared its head is how Activistic’s apps are making revenue.

In an interview with Open Briefing, Activistic Executive Chairman Nigel Lee said, “the first thing to note about the business model for Activistic is that it is a “direct revenue share model”. Many app and internet models are indirect (i.e., you make money from eyeballs then hope to get advertising).

“In the case of the Activistic’s platforms this is not the case. What this means is that as donations happen then revenue occurs. In fact, 15% of the donated amount comes as revenue to Activistic. The reason that this didn’t appear in the recent cash statement is that there is a 90 day cycle to cash. For example, if I donated on 1 January 2016, $10 to Veterans Call, then the actual cash (i.e., $1.50) will only get to Activistic at 1 April 2016. I first need to pay my mobile bill (30 days), then the telcos pay the money to the charity through our partner aggregator MGF (30 days) and we bill the charity for 15% of the proceeds (30-45 days).

“This is a normal lead/lag for the cash cycle. That doesn’t mean we do not have revenues logged, it simply means the cash lags.”

Lee points out that having only launched in January, donations and the revenues from them will be published in the next quarterly statement.

As for the tech, it is gaining traction.

“We have donations and downloads today and they are building. The download rate has been steadily building from hundreds per week to thousands per day and we are now close to 50,000 downloads. The engagement in the app (i.e., people registering and exploring the app as well as donating) is increasing week on week.

“Our experience thus far has shown that there are drop off points in the experience for consumers, including at the sign-up screen. We are in the midst of changes (to be released by the end of the month) that will increase the engagement of people in the app.”

The problem is with the registration screen, but Lee is confident that the changes being made this month will iron out the friction points.

Once this is done, Activistic management will then refocus on the three tools designed to drive the business: downloads, donations and deals.

In particular, downloads and donations are targeted around the VC platform as it is the most advanced of the product set.

“We also have a number of deals both in terms of additional charities to add to the VC platform and distribution partnerships that we are developing and these will help to accelerate the uptake of VC,” Lee told Open Briefing.

“In addition, we are in various stages of discussion with a range of parties – from celebrities, charity festival organisations and major domestic and global charities regarding white labelling the platform.

“Ralli – our global charities app – is in technical beta in the UK and we are working with charities there to craft the right approach to getting traction.”

As VC is in a more advanced stage its traction is also more advanced than that of its Ralli app. Veterans Call continues to improve its download rate and has started bringing in revenues.

The app has close to 50,000 downloads, with 14% of people registering and 6% donating.

The Activistic team is now studying the data and consumer feedback to find ways to improve conversions.

“The nice thing about digital products to consumers is that the feedback loop is immediate – you can track everything from the effectiveness of ads by channel, through to the progress of consumers at each stage, or from the point of click to download through to each action within an app product,” Lee said.

“We can subsequently change the product in approximately two weeks to improve the statistics. We are now into the cycle with VC of that learn, launch, grow, learn, change, release, improve approach, having started to get mass downloads and engagement occurring.”

On the App Store and Google Play Activistic have more than 200 unique comments and an average rating is above 4.3 (out of 5).

“This is outstanding for an app at such an early stage, and as previously mentioned we are continuing to improve the product further.”

Meanwhile Ralli is slowly building in the background, however it requires a different approach to that taken with the US-based VC – an approach that will see it work more closely with its growing list of charity partners including the royal-linked Church Army UK.

Faith-based giving is big business. In fact, if we look at the US faith-based donations is a $100 billion-plus market.

“In the faith based area, we have brought Church Army on to the Ralli platform in the UK and they have expressed their desire to move to a white label approach over time.”

The other potential ace up Activistic’s sleeve is its ability to white label its technology.

In terms of white labelling Activistic is currently in talks with major charities, celebrities and event organisers. This arm of the business is taking some time to build, longer than expected, but the company is making progress.

“We were hoping to conclude one of those in Q1 but it’s taken a little longer to work through than planned,” Lee told Open Briefing.

“The good news however is that everyone we are speaking with is keen to make something happen. It’s really a question of who first. We are confident that a first white label transaction can be achieved in the short term but of course we are dealing with large celebrity and organisations so the timing is not always within our control for completion of an agreement.”

Growth is occurring slowly, but it is occurring.

If shareholders are feeling nervous, particularly with shares coming off escrow, Lee says they shouldn’t be.

“The escrow process is an important part of the protection of value for shareholders. The shares that come to market next month represent shares held by pre-RTO investors. Most of these holders became involved in Activistic in its formation and invested for the long run. Our discussions with a number of them indicate they are keen to remain on the journey given the huge potential of Activistic, so we do not envisage a large sell down of shares, particularly at current prices.”

Activistic is focused on ironing out its bugs and showing revenues in its next quarterly. The company is working hard to deliver on its promise to make charitable giving easier and put more money back in the hands of its charities.