CLE Cuba Ventures Corp. (TSXV:CUV) owns a vast portfolio of 432 Cuba-focused websites, which generate over 35 million page-views per year
SmallCapPower | January 11, 2018: Cuba Ventures Corp. (TSXV:CUV) is one of the first, and only, publicly-traded companies in North America offering direct investment exposure to the multi-billion-dollar (US$3.4 billion) Cuban travel and tourism industry. Recently, Cuba Ventures announced plans to diversify into Fintech and Consulting businesses and is aggressively moving ahead with their implementation. While the Fintech Division is focused on Remittances, Bridge Financing & Cryptocurrency/Blockchain, the Consulting Division provides business consulting services for new ventures in Cuba across the hotel, real estate, pharmaceuticals, and biotech industries. To target the large current cash-based remittance system worth $3.4 billion in Cuba, Cuba Ventures is aggressively moving ahead with the development of Revolupay, a Blockchain-based app for remittances. The Company believes Blockchain technology could be highly disruptive in the multi-billion-dollar Cuban remittance market, and expects to garner 5% share for its Blockchain in total remittances in 2018, equating to a potential profit of $3.5 million.
Cuba Ventures currently trades at a market cap of $33 million. The stock should trade based on Cuba Ventures’ ability to successfully implement its Blockchain strategy to drive its revenues and profitability.
Investment thesis
- A niche’ travel company focused on the large and growing Cuban travel market
- Diversification into Fintech and Consulting businesses could drive revenues significantly over the next few years
- A potential acquisition target
Unique exposure to Cuban travel and tourism industry
Cuba Ventures is one of the first, and only, publicly-traded companies in North America offering direct investment exposure to the multi-billion dollar (US$3.5 billion) and rapidly-growing Cuban travel and tourism industry. The Company’s Cuban subsidiary, Travelucion, owns a vast portfolio of 432 Cuba-focused websites, which generate over 35 million page-views per year and direct traffic to Cuba Ventures’ online booking, e-commerce sites and proprietary online booking system, which offers bookings for hotels, private residences, car rentals and tours.
Providing travel bookings through three of the largest locally-operated suppliers, including Havanatur, CubaTUR, and Gaviota, Travelucion have a broader portfolio of national travel and tourism packages in Cuba than most other travel providers. Travelucion’s proprietary booking systems, offered in both mobile and web-based interfaces, poll prices from each agency to determine the lowest price and best travel options for customers.
Cuba Ventures and Travelucion Media continue to invest in expanding its existing travel market in Cuba, with a specific spotlight on the emerging US-Cuba travelers with the normalizing US and Cuban diplomatic relations. Cuba Ventures is also preparing Global Distribution System (“GDS”) integration that allows real-time bookings through Amadeus and Abacus, which are online training system for the Global Distribution Systems (GDS) used in the worldwide travel industry. In August 2017, the Company inked an Memoradum of Understanding (“MOU”) with Booketea, Europe’s leading travel industry specialist, for bilateral GDS integration into all 432 of the Cuba Ventures Cuba-Centric websites.
Diversifies into Fintech and Consulting businesses
Recently, Cuba Ventures diversified its business with the creation of two new business units – the Fintech Division and the Consulting Division. While the Fintech Division is focused on Remittances, Bridge Financing & Cryptocurrency/Blockchain, the Consulting Division provides business consulting services for new ventures in Cuba across hotel, real estate, pharmaceuticals, and biotech industries. In August 2017, Cuba Ventures signed an Letter of Intent (“LOI”) with Al-Fahim Technologies Group, located in the UAE, to jointly create the Cuba financing division, known as CubaFin, with $40 million Euros (C$59 million) of initial capital, as short to medium term loans to non-governmental, non-military or non-security force entities.
Revolupay hopes to revolutionize Cuba’s remittance system: To target the large cash-based remittance system worth $3.4 billion in Cuba, Cuba Ventures is aggressively moving ahead with the development of Revolupay, a Blockchain-based app for remittances. In November 2017, the Company signed a definitive agreement with Vesilen Investments to co-develop Revolupay and its corresponding web-based system. Cuba Ventures believes Blockchain technology could be highly disruptive in the multi-billion-dollar remittance market, and expects to garner a 5% share for its Blockchain in total remittances in 2018 itself with a potential profit of $3.5 million. 
In connection with Revolupay, the Company will also develop a cryptocurrency. Called CU, the cryptocurrency will be introduced as a world cryptocurrency, which is exchange-rate pegged against major currencies. In November 2017, Revolupay identified CU Coin Cryptocurrency Data mining center in the Bahamas for possible synergy. Initial rollout of the CCU will be in the Bahamas and Cuba, expanding later to the rest of the Caribbean.
Acquisition of minority interest in a Florida-based business to promote U.S compliant travel packages
With diplomatic relations normalized and restrictions on qualified American travel to Cuba relaxed, a multi-billion-dollar travel market has opened up for travel companies such as Cuba Ventures. To capture this opportunity, Cuba Ventures recently (August 2017) acquired a 19% minority stake in International Business & Travel Opportunities, LLC (“IBTO”), a licensed and bonded travel agency, that specializes in travel to Cuba. Post-acquisition, IBTO opened an office on Lincoln Road, Miami Beach, using the trade name Travelucion Miami. The total deal value was $35,000, paid with 500,000 shares of Cuba Ventures ($0.05) and $10,000 in cash.
A potential acquisition target
With a strong foothold in the Cuban travel market, Cuba Ventures could be a potential target for many international travel companies as few U.S. and other international companies have presence in Cuba. With relations between U.S. and Cuba normalizing along with the possibility of U.S. embargo lifting, many U.S. and European companies will be willing to enter this large travel market. Western Union and Moneygram could be the most possible suitors as they are already operating in Cuba.
Outlook and valuation
Cuba Ventures business is expected to grow significantly over the next few years aided by its flagship travel business (Travelucion) as well as by its diversification into Fintech and Consulting businesses. Travelucion is expected to leverage its highly-targeted, Cuba-centric web traffic along with investment in new features (multicurrency, xml, GDS, the reintroduction of flights and package deals) to drive its travel businesses over the next few quarters. Cuba Ventures’ Fintech Division, with its focus on Revolupay that could revolutionize the Cuban remittances system, could drive revenues and profits multifold over the coming years. As per the Company’s estimates, Cuba Ventures could garner a 5% share for its Blockchain in total remittances in 2018 itself, with a potential profit of $3.5 million.
Disclosure: Neither the author nor his/her family own shares in the company mentioned above.
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