What Is the Future of Revel With New Owner and CEO?

After many months of speculation about a potential acquisition by IBM or private equity firms, point-of-sale payments company Revel Systems announced that WCAS (Welsh, Carson, Anderson and Stowe) has led a large growth round in the company that will make it the company’s majority shareholder. The company’s Co-founder Lisa Falzone has stepped down as CEO. She is getting replaced by Scott Betts, a former CEO of Global Cash Access who has also worked at First Data. Before this round, Revel had accumulated $130M in five rounds for the last six years. WCAS led Revel’s $100 million Series C in 2014. In 2015, at its last fundraiser, the company was valued at around $540 million.

Revel competes against products like Poynt, Shopkeep, E la carte, and many more in offering a tablet-based POS-solution that small and larger business owners can run from an app. Tablet-based cash-registers and cloud-based POS-management systems are a complementary direction for mPOS- and online-acquiring companies like PayPal, Square and SumUp. Most of such newcomers are from the USA (Square Stand, AllSet, Poynt, E la Carte, ShopKeep, Revel, Breadcrumb, Clover, Toast and Lavu), Canada (Shopify POS and Lightspeed), Australia (Vend, Albert) and Singapore (Mobikon and other players). There are a few other small-scale projects in Germany, Estonia, Russia, Malaysia and Indonesia.

One-half of players makes an emphasis on hardware sales (Poynt, Square Stand, SumUp Stand, Shopify POS, E la Carte, ShopKeep, Albert, Revel, Breadcrumb), another (AllSet, Vend, Lightspeed, Clover, Toast, Lavu, Erly, Mobikon) specializes in software. Again, the latter have an advantage of easier scaling and ability to expand quicker to any country in the world, however, customer engagement is not that pronounced in this case.

Most of the solutions (AllSet, E la Carte, Breadcrumb, Mobikon, Toast, Lavu) focus on F&B sector (cafés, bars and restaurants).

A few of the players are parts of bigger companies: iqPOSitive (bought by Revel), Square Stand (Square), SumUp Stand (SumUp), Shopify POS (Shopify), Albert (Commonwealth bank), Breadcrumb (was initially purchased by Groupon, which exchanged it for share in Upserve in 2016), Clover (First Data).

The client base and transaction volume of these companies are relatively small, considering potential of SMB segment, however, investments and valuations are big: E la cart attracted $15M in debt and $28M in equity financing with 85K paying clients and $1B of turnover this year, LightSpeed, with 36K clients and $13 B worth of transactions raised $30M round A from Accel, Revel, currently at 30K clients, ShopKeep – 23K clients and $70M investments in total, Vend – 18K clients and $9M raised, Mobikon – around 3.5K clients, and, finally, AllSet attracted $2.5M in round A from Andreesen Horowitz and other investors with 8500 orders in 180 restaurants in four US cities.

Segment (and Revel specifically) is highly integrated with mPOS acquiring only, whereas immense opportunities consist in partnership with such sectors as P2B- and SMB-lending and online factoring. Yet again, services of this kind don’t capitalize currently on client data (think big data crossed with online scoring), while they have it in quantity and quality good enough to facilitate targeted offers from other FinTech services (mobile wallets, remittances, microlending, etc.).