Sunday Business Post: Zamano has cash in its pocket. Now it wants to start spending. by Emmet Ryan

Ross Conlon, CEO of zamano. Photo by Fergal Ward.

Zamano, the publicly quoted Irish mobile software firm, is looking to expand via acquisition, and is targeting a purchase in the €3 million to €10 million range.

“We are aggressively looking at potential acquisitions. We have gone close a couple of times in the last six months,” Ross Conlon, chief executive with Zamano, told The Sunday Business Post.
“We had a legacy debt issue. We went from having €4 million in debt to €3 million in cash in the space of three years, a €7 million swing. That’s on our balance sheet, earning a very low interest rate, and we’re looking to use it.”

The Dublin-based business has a clear idea of the type of company it wants to acquire and Conlon said the firm is continuing to seek out potential purchases.
“We want companies that are targeting the Irish and British markets, in the mobile payments space, that are profitable and with a growing customer base,” said Conlon.
“We want companies that have synergies with us. We are looking to grow in the mobile payments and mobile marketing sectors. There are a lot of companies out there with a lot of hype, but they aren’t really making money. It’s not about being profitable now, it’s about showing they are going to be.”

The Zamano chief executive said the firm is recognising shareholder needs with this specific outline.
“We’re a plc so we have to be disciplined about it. If we bought a good company but overpaid, that would hurt us. Everything has to go through our board so there is usually a very grounded discussion,” said Conlon.
“There’s nothing like looking at your share price in the morning and going, ‘Well that’s what you’re worth and this is what you need to do’.”
Conlon said the firm is heavily focused on the payments and marketing side of the business because that is where he sees customer demand growing.
“In the future, payments are going to happen on your mobile phone. Whatever is the simplest is going to work. I don’t think people are going to type in a 16-digit credit card number on their phone.

“We’re looking to stay close to the networks. There are new payments systems coming out and a move towards seamless digital transactions,” he said
“Ads on the phone are going to be seamlessly linked to payment. You might see an ad for an ASOS T-shirt and you will be able to click on it and go straight through to purchase. Ease of use for the customer is going to be the priority. Those are the companies that will do best.”
Zamano currently has 25 staff and has recently shifted its focus more to the business-to-business side of its operation. Conlon joined the firm in 2008, and become chief executive in 2013.
Growth of the business-to-business model has come at a cost, with profits dropping in their last set of reports. Conlon said the move would, however, be worthwhile due to the larger market at Zamano’s disposal.

“It’s lower margin revenue, but lots more of it. That takes time, but over the next six months we’re going to see it grow,” Conlon said.
“A lot of the customers are developers, people with apps. We have a lot of experience dealing with the end user, we have a huge database, and we’re bringing that to business customers,” Conlon said.
“None of our decisions is made off the cuff, we look at trends based on our data. We see different habits with different phones, connections, and regions. We have an engine in there that’s constantly adjusting to adapt.”

The financial sector is a key target for Zamano, with banks looking to integrate their services more with customers’ mobile devices. Conlon said he could see financial service providers directly entering the mobile provider space in the near future.
“We’ve a broad range of customers, including some banks. If a user goes to an ATM and loses their card, they can get a unique text message that allows them to access their account. It’s not just about apps, it’s about working with all businesses that need to communicate,” said Conlon.

“The financial services area is going to massively change. When O2 were bought by 3, it wasn’t beyond the realms of possibility that they could have been bought by a bank. I wonder why Bank of Ireland or AIB didn’t try to acquire them?” he said.
“Banks are moving towards more digital, app-based, models. The key things for them are security and access to customers, which mobile networks can provide.”

To read the full article, please go to the Business Post website here.

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