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Infobird: Client Diversification Is Making This SaaS Stock Very Attractive

The company is reducing its dependence on the banking sector and adding diverse clients

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Ishan Majumdar
Jul 29, 2021

Summary

  • Infobird is a risky investment because it generates the majority of its revenue from one client
  • The company is attempting to address this issue by adding more large-scale clients
  • Its standardized SaaS product pricing is very attractive and suitable for SMBs as well
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Infobird Co. Ltd. (

IFBD, Financial) is an enterprise SaaS (software-as-a-service) provider within the customer service domain that operates in the Asian market. The company is on the path to becoming the Zendesk (ZEN, Financial) of Asia as it has shifted from the customized SaaS model to a standardized model with an off-the-shelf solution for all kinds of companies. Its product pricing is extremely reasonable and appears ideal, not just for large companies but also for small and medium-sized businesses (SMBs).

In a recent press release, the company announced the addition of a major fintech giant from China to its client base, which is a significant development for the company, as it has so far been too dependent on its largest client for the majority of its income. I believe that the company has the ability to ride the digitalization wave across Asia and become a widespread low-cost customer service software solution provider in Asia as well as the rest of the world.

Client diversification strategy

Infobird has a very high dependency on China Guangfa Bank, which is the source of nearly 75% of its revenues, and it is a critical risk that the company highlighted in its SEC filings. However, the management is working to mitigate this risk by gaining nrew clients. Infobird’s transition into the standardized SaaS model has helped the company expand its services in various fields, including cosmetics, footwear, healthcare and financial technology firms.

The recent big announcement came in the form of the implementation of its new artificial intelligence-based product, Intelligent Quality Inspection SaaS, with one of the leading fintech companies in China. The company did not disclose the name of the fintech company, but the press release hinted towards the company being a large player in the Chinese market.

Prior to this fintech deal, the management made two other major breakthroughs. One was the onboarding of SaSa Cosmetics (which is one of the largest beauty retail chains in Asia) and the other is Zu Li Jian, a renowned manufacturer and retailer of footwear for the geriatric population in China. The company is providing its artificial intelligence-enabled customer engagement as well as marketing solutions and an extensive range of services to all these clientele.

The best part about Infobird's products lies in their low pricing. Its per-user pricing for its standard SaaS product starts from as low as $15, which is highly affordable to small and medium-sized businesses in Asia. According to some investors, the company also plans to promote its offerings beyond the Asian market to customers in Western markets through public cloud infrastructures like Microsoft (

MSFT, Financial) Azure and Amazon (AMZN, Financial) Web Services.

The Intelligent Quality Inspection offering

Infobird started its company life as a call center service provider for corporations looking to outsource their customer service functions, but it has come a long way since then. It has developed a wide variety of modules within its standardized SaaS offering for customer service.

The latest fintech client that the company acquired was a result of its latest innovation – the Intelligent Quality Inspection offering. This is an inspection tool of the communication content of customer service that can also help Infobird’s clients progress in their whole journey of customer relationship development by elevating the integrated upgrade of customer service marketing. It is a part of the standardized SaaS solution that will allow clients to trace the engagement between the customer service agent and the end customers.

Infobird is continuously upgrading its systems and effectively developing the application boundaries of the product. The various benefits of this offering include reducing the number of inspection personnel employed by the customer service center, improving the risk control capabilities and handling them on time, reducing the risk of customer complaints, identifying the shortcomings of a single customer service agent or the team as a whole and helping the organizations carry out more targeted training to achieve better results. It is worth highlighting that this offering is over and above their flagship Infobird Cloud Call Centre that allows teams to manage the customer service and marketing remotely by using a unified telephone system.

The management expects this new offering to boost clients' customer service platforms significantly.

Final thoughts

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Infobird's stock hasn't been doing well since it went public. I think the main problem is that it is a lightly traded microcap stock. It is trading at a price-sales ratio of around 6.05, which is far below the industry average for enterprise SaaS and also below its closest competitor in the Asian market - Cloopen Group Holding Ltd (

RAAS, Financial). The lack of awareness of the company’s product potential and also the heavy dependence in the past on China Guangfa Bank for revenues have been key factors associated with the discounted pricing of Infobird’s stock. I believe that the company has excellent potential for top-line growth as well as multiples expansion, which is why it could be an interesting opportunity for risk-taking tech investors.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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