Switchpoint Payments Business Plan — Cash, Funding and the Balance Sheet
The R22m seed, why an R85m Series A is required rather than optional, and the cash runway across four loss-making years.
Cash, Funding and the Balance Sheet
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- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. The Opportunity
- 3. Market and Regulatory Context
- 4. Product, Technology and Security
- 5. Go-to-Market and Unit Economics
- 6. SWOT and Competitive Position
- 7. Financial Projections
- 8. Cash, Funding and the Balance Sheet
- 9. Sensitivity and Scenario Analysis
- 10. Risk Analysis
- 11. Regulatory, Compliance and Licensing
- 12. Organisation and Management
- 13. Implementation Roadmap
- 14. Key Performance Indicators
- 15. The Offer, Returns and Recommendation
- 16. Assumption Register
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Volume, Pricing and Unit Economic Schedules
- C. Appendix C: Funding, Cash and Balance Sheet Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 8.1 The cash path
- 8.2 The funding gap is the central structural feature
- 8.3 Use of the seed proceeds
- 8.4 Balance sheet
8.1 The cash path
|
R million |
FY2027 |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
|---|---|---|---|---|---|
|
Opening cash |
23.1 |
10.7 |
78.8 |
59.9 |
50.1 |
|
EBITDA |
(11.4) |
(15.6) |
(16.7) |
(6.6) |
19.2 |
|
Terminal fleet capital expenditure |
(0.1) |
(0.4) |
(0.8) |
(1.4) |
(2.0) |
|
Other capital expenditure |
(0.9) |
(0.9) |
(1.4) |
(1.8) |
(2.0) |
|
Taxation paid |
— |
— |
— |
— |
(0.9) |
|
Equity raised |
— |
85.0 |
— |
— |
— |
|
Closing cash |
10.7 |
78.8 |
59.9 |
50.1 |
64.4 |
8.2 The funding gap is the central structural feature
The awkward feature of the timetable is that the Series A must be raised at month 16 while the evidence that justifies it — measured migration of manual transfer volume onto the rail at the first trade integrations — does not arrive convincingly until month 18. The round is therefore raised on a partial reading. That is a real tension in the plan rather than an oversight, and it is why the month 10 trigger contemplates cutting the acquisition plan as an equally valid response to commencing the round.
8.3 Use of the seed proceeds
|
Application of seed proceeds |
R million |
Share |
|---|---|---|
|
Platform engineering and integration build |
8.6 |
39% |
|
Commercial, partner enablement and merchant acquisition |
3.9 |
18% |
|
Sponsor bank, scheme certification and PCI DSS Level 1 |
3.4 |
15% |
|
Risk, compliance and legal establishment |
2.3 |
10% |
|
Working capital and contingency |
2.2 |
10% |
|
Terminal fleet and equipment |
1.6 |
7% |
|
Total |
22.0 |
100% |
Approximately 65 per cent of the round is applied to build and regulatory establishment before any material revenue is generated. This is the characteristic cost shape of a regulated payments business and is the principal reason the round does not reach profitability. A merchant acquirer cannot process a single transaction until the sponsorship is executed, the scheme registrations are granted and the PCI DSS Level 1 attestation is issued, and none of that work generates revenue.
8.4 Balance sheet
|
R million, at year end |
FY2027 |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
|---|---|---|---|---|---|
|
Platform and terminal fleet, net |
0.8 |
1.6 |
2.7 |
4.0 |
5.2 |
|
Trade receivables |
0.2 |
1.1 |
3.1 |
6.5 |
11.5 |
|
Merchant settlement funds |
2.2 |
13.4 |
38.1 |
82.1 |
148.6 |
|
Company cash |
11.9 |
80.9 |
63.4 |
55.1 |
70.5 |
|
Total assets |
15.1 |
97.0 |
107.3 |
147.7 |
235.8 |
|
Share capital and premium |
23.1 |
108.1 |
108.1 |
108.1 |
108.1 |
|
Accumulated deficit |
(11.6) |
(27.6) |
(45.1) |
(52.9) |
(36.3) |
|
Total equity |
11.5 |
80.5 |
63.0 |
55.2 |
71.8 |
|
Merchant settlement liability |
2.2 |
13.4 |
38.1 |
82.1 |
148.6 |
|
Trade and other payables |
1.4 |
3.1 |
6.2 |
10.4 |
15.4 |
|
Total liabilities |
3.6 |
16.5 |
44.3 |
92.5 |
164.0 |
|
Total equity and liabilities |
15.1 |
97.0 |
107.3 |
147.7 |
235.8 |
The settlement liability line is the largest single item on the balance sheet from FY2029 onward, reaching R148.6m by FY2031. It is matched exactly by the merchant settlement funds asset above it, carries no interest, and is not available to the company for any purpose. Company cash — the figure that determines runway and against which every trigger in this plan is tested — is R64.4m at FY2031, less than half the settlement float.