Coro Global (CORO) has filed to raise $11.5 million in a U.S IPO, according to an S-1 registration statement.

The firm is developing blockchain-based software solutions for currency transmission and related purposes.

CORO has little in the way of track record and its products are not in the market yet, so the IPO will be challenged to gain interest, especially in a difficult IPO market.

Miami, Florida-based Coro was founded to provide distributed ledger currency and financial crime risk management solutions for financial applications

Management is headed by Chairman and CEO Mark Goode, who has been with the firm since May 2018 and was previously founder and CEO of The Peninsula Group, an investment origination and fund management company in the life insurance settlement market.

Below is a brief overview video of Coro Global:

Source: Coro Global

The company’s primary offerings include:

  • Money transmission services
  • Financial crime risk management platform

The company does not yet have a functioning business for its two primary business lines, that of money transmission and financial crime risk management.

The two systems are currently under development.

According to a 2019 market research report by Zion Market Research, the global market for digital remittances was $1.93 billion in 2018 and is expected to reach $8.61 billion by 2025.

This represents a forecast 23.8% from 2019 to 2025.

The main drivers for this expected growth are increasing demand for low cost remittances and continued development of technological solutions in this fast-changing marketplace.

In addition, growing regulatory acceptance and clarity regarding digital remittance technologies will lead to greater involvement by firms employing solutions.

Major competitive vendors include:

  • InstaReM
  • Flywire
  • Western Union
  • Ria Financial
  • SingX Pte
  • WorldRemit
  • Remitly
  • Azimo
  • TransferWise
  • Ripple
  • MoneyGram
  • TNG Wallet

Coro’s recent financial results can be summarized as follows:

  • Zero topline revenue in 2019
  • Operating losses and negative margin
  • Increasing cash used in operations

Below are the firm’s operational results for recent reporting periods:

Source: Coro S-1 Filing

Source: Coro S-1 Filing

As of December 31, 2019, Coro had $470,800 million in cash and $33,933 in total liabilities.

Free cash flow during the twelve months ended December 31, 2019, was a negative ($2.2 million).

Coro intends to raise $11.5 million in gross proceeds from an IPO of its common stock, although the final amount may differ.

Management says it will use the net proceeds from the IPO for “general corporate purposes, including completing the testing of, launching and marketing of our Coro product, the launch of our FCRM product and working capital.”

Management’s presentation of the company roadshow is not available.

The sole listed bookrunner of the IPO is Aegis Capital.

Commentary

Coro is seeking to tap public capital markets for capital to finish its two product lines.

The company’s financials indicate mostly startup costs and little to no revenue.

It is highly unusual for a non life science company to seek public investment without completed products and a demonstrated track record of sales growth and operational results.

The market opportunity for remittance services is large and in a state of flux with the slow rise of the use of blockchain-based software for lower cost service offerings.

Aegis Capital is the sole underwriter and IPOs led by the firm over the last 12-month period have generated an average return of negative (77%) since their IPO. This is a bottom-tier performance for all major underwriters during the period.

Coro’s lack of revenue and still-to-be launched product / service lines will make it difficult for the firm to IPO, especially in the current volatile and challenging overall stock market environment which filters through to the IPO market.

When we learn more IPO details, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.