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ASX RELEASE – CRE8TEK
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Quarterly Company Update
US customer growth accelerates with Flamingo successfully signing a Proof of
Technology contract with an additional leading US insurance company
Flamingo successfully penetrates the Asia Pacific market signing a Proof of
Technology contract with AMP Limited and a non-binding term sheet with
DirectMoney Ltd during the period
Flamingo boosted the company’s data science capability with Dr Jack Elliot,
Dr Han Xu & Parisa Kouchaki focused on further developing Rosie, Flamingo’s
Cognitive Virtual Sales Assistant
Flamingo secured high profile talent with Rohinee Mohindroo as CTO of US
operations and Brenton Charnley joining as Chief Commercial Officer
The Company generated $253,000 of invoices in the quarter for paid trial
work, with this revenue expected to be realised in the next quarter
PERTH, 31 JANUARY 2017: Cre8tek Limited (“Cre8tek” or “the Company”) (ASX: CR8) is pleased to
provide a commercial update for the three months to 31 December 2016, together with its Appendix
4C for the quarter.
Following the Company’s re-instatement onto the ASX after acquiring Flamingo Customer Experience
Inc., which provides Cognitive Virtual Sales Assistant, Artificial Intelligence technology, the Company
has seen significant business momentum and customer growth during the quarter, with progress
expected to continue into the 2017 calendar year.
US CUSTOMER GROWTH ACCELERATES
Flamingo has a Master Services Agreement in place with Nationwide Mutual Insurance, a Fortune 100
company. During the quarter work with Nationwide on developing a Cognitive Virtual Sales Assistant,
Intelligent Guided Selling and Intelligent Guided Servicing platform, progressed significantly and the
Company remains on track for the implementation of Flamingo’s technology to go-live in Q2 2017.
During the quarter, Flamingo also successfully signed a Proof of Technology contract with an additional
leading US based insurance company on a paid trial basis. The purpose of the trial is to evaluate the
applicability of using Flamingo’s Cognitive Virtual Sales Assistant and Intelligent Guided Selling
technology across their business.
ASIA PACIFIC STRATEGY IMPLEMENTATION SUCCESSFULLY COMMENCES
In December 2016 Flamingo secured a Proof of Concept contract with AMP Limited. The paid trial of
Flamingo’s Cognitive Virtual Sales Assistant platform commenced in December 2016 and is due to golive in Q2 2017.
Flamingo has also signed a non-binding terms sheet with DirectMoney Ltd – a listed Australian based
company that leads the online personal loan market. The terms sheet is for a paid trial of the Cognitive
Virtual Sales Assistant and Intelligent Guided Selling technology, with negotiations for a binding proof
of concept contract expected to be finalised shortly.
T: +61 8 9486 7244 | A: 108 Outram Street, West Perth WA 6005
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FLAMINGO FOCUSES ON AI
During the quarter Flamingo continued to focus on, and invest in, the development of one of the
world’s first significant Conversational Commerce platforms to provide Cognitive Virtual Sales
Assistants to financial services companies globally.
Dr Jack Elliot committed to full time employment as Flamingo’s Chief Data Scientist and is leading the
Machine Learning program at Flamingo. Dr Elliot’s team is responsible for developing Rosie, Flamingo’s
Cognitive Virtual Sales Assistant, while also developing further IP and patents in this field of Narrow
Artificial Intelligence.
Working alongside Dr Elliott, Flamingo also welcomed Dr Han Xu as a Senior Data Scientist, previously
at Macquarie Bank, to the company during the quarter. Dr Xu has a PhD in Machine Learning and
Natural Language Processing (NLP).
Also joining the Data Science team during the quarter was Parisa Kouchaki who has completed a PhD in
Data Science, Machine Learning and is skilled in advanced data analysis, inferential statistics and
predictive modelling techniques.
In November, Dr Catriona Wallace, Company CEO and founder of Flamingo, presented research on
Artificial Intelligence and Chatbots to industry leaders and investors. This program was sponsored by
Sugar CRM. Interest in Flamingo’s technology off the back of the presentations was significant across
the quarter and early stage discussions with potential clients continue. Based on the success of this
research and marketing program, Flamingo will conduct a similar study and event program in
partnership with channel partners, The Clarion Group (Hartford, Connecticut), for the US market in Q2,
2017.
During the quarter Dr Wallace provided keynotes at two large events hosted by the NAB focused on
their Financial Planning network. Over 300 Financial Planning business owners attended these events
and discussed the rise of AI and Chatbot technology and its application to financial services.
During the quarter Flamingo also engaged in discussions with potential channel partners in both the US
and Australian markets. These negotiations will continue in Q1, 2017.
FLAMINGO INVESTS IN HIGH CALIBRE TECHNICAL & COMMERCIAL TALENT
In December 2016 Flamingo secured the services of prominent US technology expert Rohinee
Mohindroo as Chief Technical Officer of Flamingo’s US operations based in New York City. With
Flamingo’s large sales pipeline in the US, Rohinee is leading the effort to prioritise and convert these
opportunities with a key focus on the Insurance vertical.
Also in the quarter the Company secured the employment of Brenton Charnley as Chief Commercial
Officer, who commenced in January 2017. Brenton’s previous roles include being Head of Innovation at
Metlife Insurance and prior to this as Innovation Manager at KPMG as well as being global program
manager for elevate61, KPMG's start-up accelerator.
Rachel White, who has been Flamingo’s CFO since June 2015, where her expertise in guiding early
stage companies through start up to listing phases has been invaluable has now completed her role.
From February 2017 Brenton Charnley will be responsible for all commercial and financial matters
related to Flamingo and will continue to refine the commercial and pricing strategies for the business.
The Board and Management team is highly appreciative of the work Rachel has done with the Flamingo
business.
Joining Brenton in the Commercial Team is new hire Bree Clare, who has been appointed as Finance
and Operations Manager. Bree’s previous experience includes being the company secretary for Jobvibe
and Finance and Operations Manager at high-profile Start Up Accelerator, Pollenizer.
FINANCIAL UPDATE
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The Company generated $253,000 of invoices in the quarter for paid trial work, referenced in the
Appendix 4C. This revenue is expected to be realised in the next quarter. The Company also expects to
generate additional revenue from further paid trials in the next quarter and is targeting Monthly
Recurring Revenue (MRR) to commence during the following quarter.
The planned expenditure in the next quarter sees a continuation of the Company’s focus on Research
& Development, investing in further enhancing Flamingo’s AI and Cognitive Virtual Sales Assistant,
Rosie. These activities and investment should ensure that the technology continues to position
Flamingo to best take advantage of the opportunities presented in the rapidly emerging field of
Chatbots and Artificial Intelligence.
COMPANY OUTLOOK
Flamingo continues to have a significant sales pipeline in the US and Asia Pacific markets, and is actively
working to prioritise and convert these opportunities, which continue to present at a more rapid rate
than previously anticipated due to the increasing spotlight on the application of Chatbots and AI in the
financial services sector. The US insurance market remains the key focus for the Flamingo business and
during the next quarter the Company will progress with its strategy for Flamingo’s penetration into the
US Healthcare Insurance market, as a step towards engagement in the broader Healthcare market.
Currently the path to revenue involves:
Stage 1: Paid Trials – Proof of Concept
Due to the relative newness of the Flamingo Platform, Flamingo's process for engaging new provider
clients includes conducting trials. These paid trials have sets of hypotheses related to commercial
metrics that typically include sales conversion, customer retention and efficiency. As Flamingo takes
part in the earliest part of the customer engagement process, it becomes embedded into the value
chain, which allows for strong customer relationships to develop from the start.
Stage 2: Go-Live Subscriptions - Monthly Recurring Revenue
Once the trial has been implemented, and subject to the size of the provider, Flamingo will then seek
to enter into a more formal procurement process to establish a Statement of Work, undergo strict
security approval and execute a Master Services Agreement. At this stage Flamingo would secure
constant monthly revenue enabling easily manageable cash flow and potential long term clients.
Stage 3: Shared Revenue Pricing Model
Once the platform has been operating successfully with a monthly subscription model, it is anticipated
that a reduction in the monthly subscription price may be negotiated in favour of clients moving into a
shared revenue model where is a percentage of the first year’s premium of any product sold using the
Flamingo platform is earned.
The barriers to entry for competitors at this stage increase greatly, as the Company believes the time,
cost, security requirements and expertise to develop intellectual property associated with
Conversational Commerce and Artificial Intelligence technology is high.
Cre8tek is confident that Flamingo will continue this strong momentum into the 2017 calendar year as
it works towards on-boarding further clients and converts current trial customers into a monthly
subscription revenue model.
[ENDS]
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ABOUT CRE8TEK
Cre8tek (ASX: CR8) is a listed company that invests in pioneering technology solutions, with a particular
focus on software marketing solutions, application software, communication software, SaaS, online
social networking services, and security and encryption. Cre8tek acquired Global Agenda Technologies
Pty Ltd (Agenda) in January 2016 and recently acquired high profile Australian Fintech business Flamingo
Customer Experience Inc. in November 2016.
ABOUT FLAMINGO:
Based in NYC and Sydney, in the emerging Conversational Commerce field, Flamingo is an Enterprise
SaaS company, which provides a Cognitive Virtual Sales Assistant (Artificial Intelligence) platform
designed for selling complex financial products online. Flamingo’s Cognitive Virtual Sales Assistant or
Chatbot is called Rosie. Flamingo is one of Gartner’s ‘Cool Vendors’ and clients include large financial
services firms.
www.flamingo.ai
For further information, investor or media enquiries, please contact:
Michael Wills – Flamingo
Email: [email protected]
Phone: 0468-385-208
Flamingo - Social Media Policy
Flamingo is committed to communicating with the investment community through all available
channels. Whilst ASX remains the prime channel for all material announcements and news, investors
and other interested parties are encouraged to follow Flamingo on Twitter - @FlamingoCX and
LinkedIn.