Xcyte Digital Corp. (TSXV:XCYT) has accrued more than 150,000 events with more than 100 million participants through its acquired business assets.
The company provides immersive technology solutions – which include virtual, augmented and extended reality for companies to connect with its audiences and deploy its brand. Xcyte offers a one-stop shop for all the event technology and managed services for immersive and virtual events.
Randy Selman, CEO and director of Xcyte Digital, joins The Market Herald to discuss Xcyte’s cost efficient immersive event platform, the move to take the company public, and details on what investors can expect from the company in the short and longer term.
TMH: Now, to start off, could you please tell us about your background in the industry?
Selman: I started my career in Toronto, Canada, with Northern Telecom Nortel. I was hired as a result of my knowledge of microcomputers, which as an industry was very nascent at the time but I was fortunate to have been given great opportunities to advance and apply my tech knowledge and help Nortel develop microcomputer-based signaling systems.
After leaving Nortel and working various engineering and engineering management shops at IT&T, Modular Computers and Siemens and looking to increase my personal cashflow, I decided to make a major career change and become a salesman for Western Union. At Western, I applied my tech background convincing the engineering group to upgrade their network infrastructure to support higher speed devices and within one year, I had made the largest sale in the company’s 135-year history using their network to handle credit card authorizations.
A couple of years later, I left Western Union, started my first company, SK Technologies, which I took public in 1986 onto the NASDAQ, which was in the point of sale automation technology.
Within a couple of years, SK reached an $80 million market cap. In 1993, I left SK and I founded Visual Data Corporation, which I also took public in 1997 and over 15 years, integrated 14 acquisitions. In 2004, we changed the name to Onstream Media after an acquisition of a company by that name, and we reached a market cap with over $250 million.
Onstream Media developed one of the first webcasting platforms back in the late 1990s, as well as one of the first online trade shows back in 2010. Starting in 2017, we developed a comprehensive virtual trade show platform, which we continue to update and maintain today.
So as you can see, not only do I have an extensive background in virtual events and event technology but I have significant experience and success in the capital markets and in M&A.
TMH: Now let’s move over to Xcyte Digital. Tell us about that company and how you’re moving all of your expertise into that.
Selman: Xcyte Digital was created to take advantage of the demand that was created as a result of the pandemic and the growing value created by the introduction of spatial computing, immersive and virtual reality environments.
Although COVID, for the most part is over, corporate clients have realized the cost savings, efficiency and value of continuing to use these type of events. Xcyte will offer our clients the ability to choose from many diverse platforms, each built for different business use cases, thereby eliminating the technological risk.
We expect to have 80 per cent margins, minimal technology investment and virtually all future revenue will be recurring subscriptions. The business assets acquired by Xcyte have performed more than 150,000 events with over a hundred million participants. Over the last two decades, these assets from the legacy business serviced over 20,000 clients and combined with our new event technology and our disruptive marketing solution, should create a substantial growth opportunity for Xcyte.
TMH: What was behind the decision to take the company public?
Selman: Well, having extensive experience in the public markets for more than 30 years, I realized that in order to take advantage of the valuations given of virtual event businesses and to raise the required capital to facilitate the acquisition goals, we would need a public vehicle.
I decided to list in Canada because the Toronto Venture Exchange provides a real trading environment for a small cap stock. My plan was to start there and then after accomplishing a level of organic growth and certain acquisitions, we would qualify for a NASDAQ or NYSE listing, which I’m hoping to accomplish and list in two years.
TMH: What advantages does the company offer to investors and virtual event users?
Selman: So smart investors typically invest in the leadership, and I believe our team is probably the most skilled in the event business at producing virtual events as well as all the sub-components such as conferences, webcasts, webinars and online meetings.
As I mentioned, we produced over 150,000 events over the years. In fact, 78 per cent of the Fortune 100 have used our services. Xcyte offers the investment community the ability to participate in a fast-growing, technologically advanced sector with excellent margins and especially at the right time.
The overall events industry is expected to double in size to $2 trillion by 2023, and that’s according to Custom Market Insights. Virtual events in all its variations is expected to grow to $1 trillion by 2032 according to Market.US. Four times its current level.
There have been several industry transactions, some as recently as a few months ago, that clearly demonstrate the value of the businesses in this exploding industry. For instance, in March of this year, Blackstone paid $4.4 billion for event company Cvent, a seven times revenue valuation.
TMH: And what can you share about the advantages to the virtual event users?
Selman: For our customers, Xcyte Offers is a one-stop shop for all the event technology and managed services required to produce an immersive or virtual event at a very cost efficient subscription price.
We provide the base platform, which provides the tech for all monetization, such as ticketing and pay-per-view, as well as analytics, metrics and e-learning. In addition, Xcyte offers full managed services including training, design, build out and production.
Xcyte provides all the required streaming and communication services, especially for large-scale audiences. These capabilities are integrated as needed and depending on the use case, the client has access to use any of the third party virtual or immersive event platforms that we offer, and these are some of the most renowned platforms offered today.
TMH: What can investors expect over the next three to six months?
Selman: So we plan to complete two to three accretive acquisitions that are expected to immediately impact our revenues and improve functionality to better service our clients. We expect our disruptive multi-platform subscription program will attract new clients and enable us to upsell existing clients.
With over 2,000 active clients, and as I said, more than 20,000 clients that have used our services over the past 20 years, we believe many of these will find our new offerings to be very attractive.
TMH: Is there anything else you would like to share before we let you go?
Selman: Yes. From an investment perspective, I think Xcyte is perfectly positioned to create value for our shareholders by becoming a leader in the virtual and immersive event space, and specifically to benefit from the anticipated growth of the industry.
I think our organic growth and acquisition strategies are poised for very quick revenue impact and as I said previously, we can create significant value for our shareholders in a relatively short time.
Xcyte Digital trades on the TSXV under the symbol XCYT. You can stay updated at Xcyte Digital.
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