It’s been a busy couple of months for ‘buy now, pay later’ (BNPL) companies.
Stocks like Afterpay, Zip Co, and Sezzle have lit up the ASX. Making some incredible — and frankly scary — returns.
However, we must remember that there is more to the fintech sector than just BNPL.
Despite being overshadowed, there are still plenty of emerging fintech stocks. Companies that are also carving out a niche for themselves amidst the pandemic.
One such company is 9 Spokes International Ltd [ASX:9SP]. A tiny software outfit that has just landed itself a huge partnership with Visa.
They’re already trading 38% higher today, thanks to the news. And this could be just the beginning…
A foot in the door
9 Spokes, compared to most fintechs, definitely focuses more on the ‘tech’ than the ‘fin’.
They’ve built a ‘digital ecosystem’ that is designed for aggregating a business’s data. Particularly between the business, the apps they use, and their bank.
Essentially, it is a management tool used to simplify the hassle of multiple apps or tools, giving a business a dashboard that can display all the meaningful information it needs.
We’re talking integration of things like Google Analytics, QuickBooks, and Shopify. Apps that are all popular tools for modern, online operators to achieve their goals.
Now though, they’ve also secured a five-year contract with Visa.
Under the terms, Visa will now offer 9 Spokes to their own customers. Using a reselling agreement to provide their software to any and all who could use it.
Needless to say, it could lead to hundreds or even thousands of new customers for 9 Spokes. A deal that will give them the foot in the door they need to reach their target market.
As 9 Spokes CEO Adrian Grant comments:
‘The relationship between financial institutions and small businesses is evolving rapidly and 9Spokes is looking to play a crucial role. It’s exciting to work with Visa to realize these ambitions.’
It will be fascinating to see just how much value the company can extract from this data focus. A model that has obviously worked wonders for some much bigger tech companies.
For that reason, they truly do have the potential to become much bigger than just another fintech company. It will all depend on how impressive their ecosystem is, and how much they can innovate upon it.
Tech continues to impress
At this point it’s really no surprise to see another tech stock making waves.
Just like the BNPL sector itself, tech has drawn a lot of attention lately. Driven by a surge in awareness — and dependence on — digital channels.
The pandemic has pushed the entire retail and commercial space forward by years. Forcing us all to rely on technology like never before. And plenty of companies are reaping a lot of reward because of that.
9 Spokes is just the latest to do so.
For investors though, picking the best from the rest isn’t easy. After all, there are a lot of tech stocks to pick from nowadays. Especially in the small-cap space.
Fortunately, we can give you a few ideas of where to look.
We’ve sorted out our three favourite tech stock trends for 2020. Areas that we believe any small-cap investor should consider for their own portfolio. Including some specific stocks that have plenty of potential.
Because if 9 Spokes is any indication, the tech stock boom is far from over yet.
For Money Morning