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Thursday, May 25th

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MGI 360 Ratings: Avangate in eCommerce Platforms

INITIAL RATING: We are initiating coverage of Merchant-of-Record supplier Avangate with an MGI 360 Rating of 46 and a Neutral outlook.

OPINION: In late 2015 the owners of Avangate, private equity firm Francisco Partners initiated a house cleaning exercise that brought in new management, laid off 15-20% of staff, closed the SF Bay Area HQ and cleansed the customer rolls of high-risk merchants. As a result of the reorganization revenue declined, but now appears stable and the company is operating at break-even. No new high profile customers were added during the recent period. Avangate now has a clean slate for taking the business forward. To get back to growth mode the company needs to embrace new business models, initiate a partnership strategy to enter new markets and generate leads. Moreover, Avangate needs to re-focus its marketing on the US. Current customers should ask for roadmap updates to ensure that Avangate‚Äôs future plans are aligned to customer priorities.

USE CASE: The best use case for Avangate today is within software and other digital goods and services companies seeking to scale-up by monetizing international opportunities of under $5 million.

COMPANY DESCRIPTION

Founded by a serial Romanian entrepreneur, Avangate helps software companies and e-book vendors reach international markets. The Avangate Merchant of Record platform provides all-in-one payments, commerce, billing, merchant services, and a large network of affiliates focused on digital goods and software. The company has become a US-centric business run by a US-based executive team. Company official headquarters is in Amsterdam, The Netherlands.

 

COMPETITORS: Cleverbridge, Digital River, PayPro Global, FastSpring and best of breed Agile Monetization tool suppliers

 

ABOUT MGI 360 RATINGS:

MGI 360 Ratings is a comprehensive system for evaluating technology companies. IT organizations use MGI 360 to track suppliers, assess purchasing risks and identify promising new vendors. Vendors utilize MGI 360 to track their markets and evaluate partners. Institutional Investors use MGI 360 for independent assessment of tech companies. MGI 360 ratings help lower costs, save time, reduce risks, and identify new opportunities. 

The MGI 360 ratings are on a scale from 0 to 100 and reflect company opinions of MGI analysts in five key areas on a scale of 0 to 20: 

  • PRODUCT: How strong is the product competitive position 
  • MANAGEMENT: How competent and experienced is the management team 
  • CHANNELS: Does the company have a sales capability and channels needed to bring products to market 
  • STRATEGY: Does the company have a realistic view of the opportunity and a compelling strategy for success 
  • FINANCE: Is the company growing and profitable. 

Each of these key criteria is subdivided into numerous sub-categories. In total, over 149 criteria are combined to generate an MGI 360 rating in each specific market space. Companies can have one or more MGI 360 rating - one for each market. MGI 360 ratings are revised as important developments occur. While the MGI 360 rating process is comprehensive, this scoring system is not meant to be a predictor of company solvency, liquidity, absence of accounting fraud or stock performance. Access to MGI 360 Ratings is by subscription. 

 

ABOUT MGI RESEARCH:

MGI Research is an independent industry research and advisory firm focused on disruptive trends in the technology industry. Through subscription research, advisory engagements, industry studies and ratings, MGI Research helps clients identify opportunities for reducing IT costs and minimize technology risks. MGI Research analysts work closely with user organizations to create practical strategies for new technology initiatives such as mobile, virtualization, SaaS and cloud computing and make timely go/no-go IT investment decisions. For additional information, to purchase a subscription or to schedule a confidential consultation, call +1 888 801-3644 or visit www.mgiresearch.com http://www.mgiresearch.com

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