Comment on Bricknode’s New Client

Bricknode announced on Tuesday, January 3rd, that a fund management company (“the Client”) has chosen Bricknode’s digital investment management platform, Bricknode Broker, to be an integral part of the scaling up of its investment operations.

Bricknode has signed an award-winning Swedish fund manager to Bricknode Broker. The agreement will help facilitate a centralized hub for fund order routing and client account management for the Client. The name of the fund manager has not been made public due to commercial reasons. The Client chose Bricknode’s digital investment platform because they needed a function-rich and flexible investment operation software to support the operations team with the current workflows and where new markets and distribution channels can be added at a later date. Bricknode has also been chosen due to its comprehensive solution which provides automation and scalability to support the fund management company’s growth plans.

Bricknode also announced on December 30th, that they have secured a loan of 2.5 MSEK provided by Founder and co-CEO Stefan Willebrand, co-CEO Erik Hagelin and Chairman Robert Lempka. The loan will continue to support the company as it pursues its goal of reaching profitability. The loan term is on 1 year with an interest rate of 1.5% per month.

Analyst Group view on the agreement with the new Client and the secured loan

Bricknode has a strong momentum where Bricknode has signed its third client that have selected Bricknode Broker within the last month. As mentioned earlier, the sales cycles are long in regards to Bricknode Broker, where a new customer implies a significantly higher ARR and Bricknode has now announced three new wealth customers. The new customers sit within three different wealth segments, where the new customers are a wealth management firm, a corporate finance and advisory service provider (Vator) and now a fund management company. Bricknode Broker is a complete and comprehensive solution that enables securities firms to administer their financial operations. The new Clients within three different finance and wealth segments can be seen as a proof of Bricknode Broker’s wide range of use, and also imply a greater potential within the whole finance and wealth market to support and administer financial operations. Analyst Group consider the new Client to be a further significant achievement for Bricknode and expects, together with the earlier two announced customers, a great growing ARR from 2023 and going forward. Bricknode has a strong momentum and has been delivering on their strong pipeline, but also continuing to possess a great pipeline with over 50 prospects.

In August 2022 Bricknode implemented a plan to reduce costs and accelerate the path to profitability and the effects of the implemented plan could be seen already in the third quarter with a reduced EBITDA loss Q-Q of approximately 34% and a reduced staffing cost Q-Q of approximately 2 MSEK. Bricknode has as of December 30th secured a loan of 2.5 MSEK provided by the company’s co-CEOs (Stefan Willebrand and Erik Hagelin) and Chairman Robert Lempka. The loan will support the company as it continues its path to profitability and is a proof of Bricknode’s strong management. At the end of Q3-22 Bricknode’s cash and equivalents amounted to 7.7 MSEK.

In the third quarter we could see early effects of the implemented plan to reduce fixed and variable costs, and Analyst Group also expects further cost reductions going forward. As of today, Analyst Group consider that Bricknode has a stronger financial position with a lower risk of raising additional external capital and where Bricknode with three new clients to Bricknode Broker also possesses a great position to scale up the ARR from 2023 and beyond.