I am not usually one to interview people, so far it has always been the other way around! On a normal day I am the type of person who is working on the next Big thing behind the scenes, however when presented with the opportunity to interview the CEO of RS2 I simply could not refuse.
RS2 to me is very interesting since it is a Maltese Fintech company that has been successful internationally. I believe that it is just starting to unlock its growth potential and this was the perfect opportunity to find out more about where the company is heading and what is in store for the future.
I believe I got more than I bargained for during this interview as Mr. El-Haj revealed some very interesting and exciting insights in terms of what RS2 is planning for the future.
Summary of Key findings
- RS2 onboarded a major US Bank as a client last year, the actual bank was not disclosed but he mentioned it being one of the Top 3 US Banks. The Bank is live and processing with RS2 in the US and plans to go live in 27 countries with this client.
| Rank | Bank Name | Total Assets |
| 1 | JPMorgan Chase & Co. | $2.87 trillion |
| 2 | Bank of America Corp. | $2.16 trillion |
| 3 | Wells Fargo & Co. | $1.75 trillion |
- Some new even larger potential clients are in the pipeline coming from ASIA Pacific with others in the United States
- RS2 is planning to use a German Financial Institution licence to take over the banking role for its acquiring business. This is where the lions share of the margins reside therefore RS2 will increase its margins substantially with this move.
- RS2 is radically changing its business model and increasing its margins substantially by doing so. Mr. El-Haj gave an example that for instance where acting as a processor a revenue from a client would be 250,000 per year, this would potentially shoot up to 3 million with the new licence and business model. He emphasised the huge increase profitability of the new value chain.
- The Financial Institution licence will allow RS2 to offer newB2B and B2C services under the same ecosystem.
- RS2 already has existing relationships with merchants and therefore it wants to offer shoppers through integration with its merchant clients the facility for clients to checkout within RS2 ecosystem. I imagine this to be like PayPal where customers can have an RS2 wallet and can pay using that wallet for instance.
- This e-wallet will also provide the customer with the ability to have pre-set preferences when paying for example to use default addresses according to merchant and other integrations to speed up the process.
- RS2 will have the new ability to offer FX, Credit Cards, Loans and other services in the future via the EMI licence which its product BANKWORKS already supports since the software is already used by Banks today.
- Essentially it could offer services such as Revolut (customer oriented) and also like Adyen (business oriented) and therefore together these could potentially be a powerful combination in one ecosystem.
- The company is considering a dual listing on the Nasdaq in the US or in Germany within a 2 year horizon. This is something that got me excited personally as it would benefit investors greatly due to increased exposure and beneficial tech valuations in the US. One would also expect the Nasdaq/Frankfurt share price and the MSE share price to mirror each other and in that case it would be fantastic news for Maltese investors.
- RS2 is offering 50 million in preference shares to power through this growth. The company wants to accelerate its growth by raising the funds and is targeting a valuation of 2 billion+
- The RS2 platform is offered on the cloud giving it a competitive advantage against legacy banks. The platform is cloud agnostic meaning it is offered on both AZURE and Amazon Cloud AWS.
- RS2 wants to continue to licence its software to clients that will not complete with it directly however going forward it sees a huge potential on combining its new merchant offering with its existing processing offering. Essentially rather than just sell its software, the company has figured out they can be much more profitable if they are doing the full chain themselves. Below is an illustration of what this means in terms of revenue from 25 million in 2020 to 102 million in 2023 projected which is a 308% increase.
Download the Prospectus
Investor presentation
Historic performance.
RS2 has been a top performer on the MSE with a growth of over 1,100% since its IPO in 2008.Â
My personal take – Conclusion.
RS2 has a clear vision for the future and it is easy to see that the CEO has the passion and the drive to get it done. The new F.I licence will radically transform the company whilst the money raised will mean that RS2 will have sufficient resources to make it a reality in a shorter timeframe versus its existing organic growth.
It is going to be very interesting to see how this story will continue to evolve and I look forward to following the company more closely in the future.
If you are interested to add RS2 to your portfolio you can get in at €1.75 per share (minimum investment of €1,750) the preference shares also give shareholders right to 10% more dividends than the current ordinary shares listed on the stock exchange.
How to invest
A lot of people have asked me to provide more information on how to invest. Firstly there are no fees to invest in RS2. In terms of the how see below:
Invest Online
If you know what you want as an investor you can gain access to RS2 easily via CCTrader. Check out the link below to follow a step by step guide.
–> How to invest in RS2 Software Plc’s Preference Shares (cctrader.com)
Invest with an advisor / Seek financial advice
If you wish to use a financial advisor such as Calamatta Cuschieri follow the link below.
Disclaimer
This blog is issued in my personal capacity for informational purposes only, and is intended to share knowledge with people who are interested in the world of Finance and Technology. It is NOT intended to be investment advice and in no way an endorsement or a recommendation to buy shares in this or any other company. No person should act upon any opinion and/or information in this document. Any potential investors should make their own decisions and obtaining professional advice if needed.
Some introductory material on RS2
Important Disclaimer
This blog article is issued in my personal capacity for informational purposes only, and is intended to share knowledge with people who are interested in the world of Finance and Technology. It is NOT intended to be investment advice and in no way an endorsement or a recommendation to buy shares in this or any other company.
No person should act upon any opinion and/or information in this document. Any potential investors should make their own decisions and obtaining professional advice if needed.
Any performance figures quoted refer to the past and past performance is not a guarantee of future performance nor a reliable guide to future performance. This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal or any other ancillary regulatory advice.
Similarly, any views or opinions expressed are not intended and should not be construed as investment, tax and/or legal recommendations or advice. I have not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this document. I do not accept liability for actions, proceedings, costs, demands, expenses, damages and losses suffered by persons as a result of information, views or opinions appearing on this document.