Last month binary options turned blockchain technology company TechFinancials Inc (LON:TECH) announced that it has signed a binding agreement with Footies Tech Ltd. to establish a new company subsidiary NewCo.
Now that the final terms of the venture have been agreed, you can read all about it below:
Asaf Lahav, CEO of TechFinancials said:
We are delighted to announce our second blockchain venture, which comes on the back of our diamond exchange project, CEDEX, which went live on November 27 2018. TechFinancials uses blockchain technology, tokenization and smart contracts to make trading and exchanging “real assets” easier, cheaper and more accessible. With the Footies platform built on the Company’s pioneering proprietary blockchain infrastructure, we aim to disrupt the broken market of sports ticketing and bring the power back to venues, clubs and fans.
We look forward to working with the Footies team and believe that with their deep knowledge of the football industry combined with our technological and business expertise, we will deliver an excellent product to the market.
Ian Ayre, Chairman of the NewCo stated:
I am delighted to be involved in the establishment of such an exciting and innovative company in partnership with TechFinancials. There is huge demand for the secondary ticketing market in the sporting industry to be revolutionised in order to make it fully transparent and to make sure that a fairer deal is ensured for both the venues and the customers. For years, both of these parties have suffered at the hands of ticket touting, and we aim to solve this by making it a more secure and stable market.
Supported by TechFinancials’, I look forward to developing and growing the business to transform the way organisations handle their events more effectively, for the benefit of all involved in the ticketing process.
The details of the official announcement reads as follows:
- The venture will develop and market a blockchain based ticketing solutions and event economics management system for sports venues and teams
- Initially, NewCo will focus on enabling sports organizations to take full control over their ticket path once issued, including secondary market trading configuration and enforcement
- NewCo’s vision is to fully digitise sport’s match day experience to economically benefit both fans and football clubs
- Ex-CEO of Liverpool Football Club Ian Ayre to be Chairman of NewCo
- TechFinancials will license its technological blockchain infrastructure to NewCo
Combining Footies’ IP and data with TechFinancials’ proprietary technology, NewCo will develop and market a blockchain based ticketing solution and event economics management for sports venues and teams. The initial phase of the product will focus on enabling sports organizations to take full control over their ticket path once issued including secondary market trading configuration and enforcement (via smart contracts), resolving one of the biggest business challenges football clubs are facing today. NewCo’s vision is to fully digitize sport’s match day experience in a way that is mutually beneficial for fans and clubs alike.
Market & Strategy
Attendance at sporting events has rapidly increased in popularity over the past decade. This is believed to be directly linked to increased TV and online access to watching top tier league matches, which fuels fast-growing fan bases worldwide. For instance, football, the world’s most popular sports game, boasts an estimated 4.2 billion fans and is worth circa $35 billion per annum. Notably, these figures are only the official estimates and do not account for lost revenue on the secondary ticket market.
NewCo’s initial product offering will be its Secondary Market Control Module (SMCM) which addressesthe largest cause of revenue loss for clubs. SMCM is the first phases of NewCo’s Event Economics Management System for sports venues and teams rollout.
Details of the Venture Agreement
TechFinancials will hold 75 per cent of the shares of NewCo, and Footies will hold the remaining 25 per cent of the shares. NewCo will establish an option plan for founders and employees that will be 20% of NewCo’s issued share capital. NewCo will be registered in the United Kingdom and will be chaired by Ian Ayre, currently Chairman and Founder of Footies, and Chief Executive Officer of Nashville’s Major League Soccer club. He was previously Chief Executive Officer of Liverpool Football Club.
Under the Agreement, TechFinancials will commit to support the financial needs of the NewCo with a cost cap of US$500,000 for the development of a proof of concept by NewCo for a European football club (“POC”), employees’ and consultants’ salaries, administration costs and business development and other expenses to be agreed by the Parties. All costs borne by TechFinancials and/or monies paid to NewCo shall be deemed to be a shareholder loan by TechFinancials that will bear no interest.
In addition to the costs described above, TechFinancials will license its technological blockchain infrastructure wherever suitable, free-of-charge to NewCo in order for it to build a solid software infrastructure and shorten development timescales.
TechFinancials’ commitment is subject to execution by NewCo of at least one agreement to develop a POC within three months of the Parties signing the Agreement.