RedCloud (RCT) Registration Filing summary

Company overview and business model

• Operates an AI-driven Open Commerce platform connecting FMCG brands, distributors, and retailers in emerging markets, enabling B2B trade and data-driven insights for inventory and purchasing decisions.

• Revenue is generated from a take rate (1–5%) on transaction value, paid by brands/distributors; retailers pay no transaction fees.

• As of September 30, 2024, the platform had 511 distributors, 6,114 brands, 154,311 products, and 25,311 retailers, with operations in Argentina, Brazil, Nigeria, and South Africa.

• The company is expanding its AI and machine learning capabilities to enhance recommendations, fraud detection, logistics, and dynamic pricing.

• The business model is asset-light, with no inventory, warehouses, or delivery vehicles; all logistics are managed by platform participants.

Financial performance and metrics

• For the six months ended June 30, 2024: revenue was $16.1M (up 160% YoY), operating expenses $32.7M, and net loss $23.9M.

• For the year ended December 31, 2023: revenue was $19.8M (up 605% YoY), operating expenses $45.5M, and net loss $32.4M.

• Total transaction value (TTV) for the six months ended June 30, 2024 was $944M, with an average take rate of 1.7%.

• As of June 30, 2024, cash and cash equivalents were $2.2M, with a stockholders' deficit of $44.6M and working capital deficiency of $14.2M.

• The company has incurred recurring losses and negative cash flows, with a going concern warning from auditors.

Use of proceeds and capital allocation

• Net proceeds from the IPO will be used to repay up to £2.5M ($3.5M) of debt, fund market expansion in Nigeria, Argentina, South Africa, and Brazil, further develop AI capabilities, invest in platform upgrades, and for working capital.

• May also use proceeds for potential acquisitions or investments in complementary products or businesses.

• Proceeds are expected to fund operations for at least the next 12 months.