Jeff Bezos is no fool. Amazon revolutionized retail, AWS laid the foundation for 21st century computing and the online giant’s recently announced US$13.7 billion-dollar acquisition of Whole Foods may just disrupt how food reaches your table.
This is what makes rumors of a possible US$9.0 billion-dollar acquisition of online communication and collaboration darling, Slack, particularly tasty. Bezos isn’t interested in just market share, he’s shown an affinity for transformative opportunities which have in turn helped lay the foundation for whole new paradigms of business. Now he is taking a shot at UC or unified communications.
According to a recent MarketsandMarkets report, enterprise collaboration is expected to grow at 13.2% CAGR to a US$49.51 billion global market by 2021. It’s not surprising that Bezos wants in.
He isn’t the only one.
Among the hundreds of collaboration products already available and countless hopefuls looking to penetrate the space, Vancouver-based Calyx Bio-Ventures (CYX.V), has worked to set itself apart with a comprehensive suite of communication and collaboration solutions originally developed for the burgeoning legal cannabis market.
I wrote about the company a while back and expressed a few doubts regarding Calyx’s success within the space. Roger Forde, Calyx CEO, rose to the occasion and called to give me a demo. He also did his level-best to explain how Calyx’s potential made it cheap money in a blue-sky market.
First, a recap of Calyx’s portfolio:
Cannigistics, an application management tool, LEAFHub, a secure mass communication platform and IndustryCast, a secure, customizable trading and communications platform.
Cannigistics started as a tool for the medical marijuana industry, but now is sold as a SaaS application management solution for any industry interested in advanced application access, optics and control.
LEAFHub is meant to be a gathering ground for MMJ industry peers where in a secure environment, industry participants can better connect with their peers, stay abreast of critical information and bridge gaps with new segments rising within the space.
Last but not least, there’s IndustryCast. This broadcast platform is meant to provide an opportunity for everyone in a particular industry to be connected through a single platform. It’s meant to drive industry innovation and awareness in a secure environment.
Let’s talk about marijuana for a bit. All eyes are still on production and branding. Everybody wants to invest in the Starbucks of weed, but no one seems to be talking about the systems required to efficiently administer market players as they potentially grow into national corporate concerns.
Compliance, workflow optimization, logistics and employee management are vital, and it feels as though cannabis industry entrepreneurs are re-inventing the best practices wheel every time a new dispensary opens and/or LP gets their license.
To compound this, Deloitte put out a report recently that estimated Canada’s potential recreational weed market at $22.6 billion. According to Deloitte’s math, we would need 600,000 kg annually to meet that demand.
This dwarves what LPs bring to market for medical marijuana patients and none of the current industry participants are adequately prepared for the supply chain maintenance and corporate compliance that kind of ramp up would entail. So, when the Canadian government finally pulls the trigger on recreational marijuana sometime in 2018, the industry may very well find itself being crushed under its own logistical weight.
Cannigistics provides the first industry-tailored backend option in a customizable package that answers this challenge.
Speaking of best practices, the legalized cannabis space desperately needs a good Wiki for those involved in the sector. A forum to decide/propose industry policy, exchange knowledge, network, and B2B auction product. LEAFHub is meant to be that place and with the impending launch of the company’s new website, industry players will finally get a peek.
Does the technology work?
Calyx’s IndustryCast already generates revenue in the agricultural sector addressing a real need and is about to get its first company-wide deployment when the customer implements in the coming months. A fact which sets Calyx apart from the legions of developers in the market selling a dream on vaporware.
The technology also stands apart from giants such as Slack.
For instance, Calyx’s offerings are platform agnostic and can be embedded outside of the sandbox. Whereas if you want to connect with your Slack community, you have to use Slack to do it. There’s no embedding it anywhere.
Also, messaging is catalogued in a way that makes it easier to understand, navigate and search. Whereas Slack operates on a stream-of-consciousness format which can make the above operations incredibly difficult to carry out.
There’s a bunch more functionality I could talk about in regards to smart messaging, but if I start diving into the details your eyes are probably going to glaze over, but suffice to say it’s a dream for corporate users and marketing department heads.
As such, there is plenty room for Calyx and its offerings to succeed, but the company needs to make some serious marketing moves and bring in the necessary financing in the next six months in order to solidify its position.
Where does this leave the investment community?
Brokers take note:
Let’s forget about the potential Amazon offer and say Slack is valued at US$5.0 billion after its latest raise.
If Calyx, with a working, revenue-generating portfolio, can capture just 2% of what Slack has done, it would give Calyx a $100.0 million-dollar value.
This for a company that trades at $0.06 per share with a $3.68 million-dollar market cap.
I’d have to agree with Roger, it does seem like cheap money to enter a lucrative multi-billion-dollar space, especially if your investment has the chance of turning into a twenty-seven-bagger.
I challenge you to do your homework and check out what Calyx has to offer.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.