Well, the license has come through (see here) -- exactly as CEO Peter Cook told us it would when we spoke with him in August (see here).

It's always hard to differentiate between management hubris and reasonable expectation! Anyway, shares are up 70% on the news -- Could've, would've, should've...

And that's not entirely unreasonable, given how central this was to the company's strategy.

I'm of the view that payments is ripe for disruption -- the current systems are slow, expensive and cumbersome. Even the services that have a decent UX are built on top of ancient legacy systems.

And, yes, I'll even say that I think Bitcoin (the network) will likely play a dominant role. I mean, an open source protocol that offers superior security, costs, speed and trust, on which anyone can build and integrate into their own product? c'mon! (a rant for another day perhaps).

What's less certain is to what degree Novatti will 'win' in this fast evolving space. Sure, the legacy banks aren't as nimble and forward looking, but should they shift their focus that'd be formidable competition. End then you have the likes of Block, Strike etc -- big US tech with super talented people and lots of funding.

Anyway, there's probably enough opportunity for a good number of early movers to benefit from this structural shift. So am happy to maintain my small position for now.

Thanks @Bradbury for suggesting Novatti -- it seems like a really interesting company.

Just a few quick notes from the meeting (recording will be up shortly).

The business has grown revenue at 76%pa, on average, over the last 5 years. Or about 50% if you only look at organic growth.

MD Peter Cook said that they were currently on a $4m+ per month run rate, so about $50m per year (compared to $32.5m for FY21).

So, taking that at face value, you have a business that is on a forward Price-to-sales of 1.4x. Further, one with $14m of cash (post Reckon dividend), and that is focused on hitting CF breakeven in the near term. Even under the current burn rate they have an 18 month runway.

While payment processing is the lion's share of revenue, you have a few new initiatives that look set to come on line in the coming year or so. The stablecoin initiative is fascinating, and I think there's a legitimate use case there -- but it's a fast evolving space and I'd consider this aspect of the business as very speculative at this early stage.

At any rate, given all of that, Novatti looks dirt cheap. PROVIDED they do indeed maintain sales momentum, pivot to CF+ and manage to scale effectively. On that last point, Peter did mention the attractive economics you see in payments companies when they do hit scale, so hopefully he's focused on seeing that realised.

And I personally have no doubt that Peter is right when he talks about the digital transformation of payments. Whether or not Novatti ends up doing well, this is space that is going to change very rapidly over the coming decade -- So i think he's right to point to massive industry tailwinds.

The harder part is understanding Novatti's chances of winning in a competitive space with lots of notable players. Peter said that it's not all about cost but increasingly functionality -- that is, their customers want to make and receive payments, but these need to integrate into existing ERP systems. And worth remembering too that half their customers are other payment providers, so it's not that all players in payments are competing with each other.

He was also at pains to point out the competitive advantage afforded by the licensing regime, as well as their various partner agreements (eg Visa, Apple Pay etc). Obtaining the banking license, which seems more like a question of when, not if, will be a good advantage.

Anyway, i'm missing a lot here, but just writing down a few thoughts while it's still fresh. I might take a small watching position on Strawman.