F-1: OBOOK Holdings Files F-1 for Nasdaq Direct Listing

OBOOK Holdings Inc., a blockchain technology company, files for a Nasdaq direct listing, highlighting its OwlPay payment platform's global expansion and recent financial performance.

Summary

• OBOOK Holdings Inc. is a blockchain technology company founded in Taiwan in 2010, operating in e-commerce, hospitality, and payments.
• The OwlPay platform, launched in 2023, is a full-stack payment service suite supporting fiat and stablecoin (USDC) transactions, targeting cross-border B2B and B2C payments.
• The company acquired PayNow, a Taiwanese payment gateway, in May 2023 for US$2.1 million, significantly enhancing its payment service offerings.
• Total revenue increased by 18% to US$7,569,630 in 2024 from US$6,399,387 in 2023.
• Net operating loss increased by 31.5% to US$8,916,637 in 2024 from US$6,778,538 in 2023.
• Total comprehensive loss increased by 31% to US$8,950,496 in 2024 from US$6,834,477 in 2023.
• In 2024, payment services contributed 53% of total revenue, hospitality 37%, and e-commerce 10%.
• Gross Payment Volume (GPV) for payment services reached US$218.6 million in 2024, a 62.5% increase from 2023.
• Active Accounts for payment services grew by 9.7% to 3,901 as of December 31, 2024.
• OwlNest (hospitality property management system) subscribers increased to over 2,500 as of December 31, 2024, from 2,343 in 2023.
• OwlNest's Annual Recurring Revenue (ARR) was US$965,630 as of December 31, 2024, a 25% increase from 2023, with a Dollar-Based Net Retention Rate of 107.7%.
• The company raised approximately US$53.7 million in financing by the end of 2024, with an additional US$16.6 million via equity and US$2.5 million via SAFE agreements in 2025, bringing cumulative funds raised since inception to approximately US$72.8 million.
• OBOOK Holdings is applying for various money transmitter and payment service licenses globally and plans to expand into new international markets.
• Darren Wang, the founder and CEO, will retain 67.2% of the total voting power, classifying the company as a controlled company under Nasdaq rules.

Sentiment

Score: 4

Explanation: While the company demonstrates strong revenue growth in its payment services and strategic expansion into new markets and technologies, it continues to incur significant and increasing net operating losses and total comprehensive losses. The direct listing process itself carries inherent volatility risks, and the company's reliance on future capital raises and market adoption of stablecoins introduces considerable uncertainty.

Positives

• Payment services revenue increased by 63.3% in 2024, demonstrating strong growth in a key strategic area.
• Gross Payment Volume (GPV) for payment services grew significantly by 62.5% to US$218.6 million in 2024.
• Active Accounts for payment platforms increased by 9.7% to 3,901 in 2024, indicating growing user adoption.
• OwlNest, the hospitality software, showed robust performance with Annual Recurring Revenue (ARR) increasing by 25% to US$965,630 and a Dollar-Based Net Retention Rate of 107.7% in 2024.
• Recognized by CB Insights as a top 2 global player in the Enterprise & B2B stablecoin category, with a high Mosaic score of 832, underscoring leadership in blockchain-powered financial infrastructure.
• Possesses an early-mover advantage in the blockchain-based payment industry, positioning it to capture market share in B2B and B2C segments.
• Building a global licensing infrastructure with money transmitter licenses (MTLs) in 35 U.S. states, VASP registration in Poland, and EPISP registration in Japan, with further applications underway.
• Leverages strong AML and cybersecurity capabilities through collaborations with industry leaders like Sumsub and Chainalysis.
• Deep expertise in blockchain technology and its diverse applications, developed over nearly a decade.
• Existing e-commerce and hospitality customer bases provide a network for cross-selling payment products and services, facilitating faster adoption.
• Successfully raised substantial capital, with cumulative funding of approximately US$72.8 million since inception, providing a strong foundation for global expansion.
• Established strategic collaborations with key industry players including Circle, Coinbase Prime, MoneyGram, MoonPay, VISA, and NIUM to enhance payment solutions.

Negatives

• Net operating loss increased by 31.5% to US$8,916,637 in 2024 from US$6,778,538 in 2023.
• Net loss increased by 51.5% to US$10,272,280 in 2024 from US$6,781,238 in 2023.
• Gross profit decreased by 20.6% to US$1,006,928 in 2024 from US$1,268,648 in 2023.
• General and administrative expenses increased significantly by 55.7% to US$5,232,219 in 2024, partly due to IPO preparation and license applications.
• Foreign currency exchange losses dramatically increased by 6,481.3% to US$1,053,705 in 2024 from US$16,472 in 2023.
• Loss on financial liabilities at fair value through profit or loss increased by 79.9% to US$259,418 in 2024.
• Revenue from hospitality-related platform services decreased by 14.7% in 2024, attributed to reduced tourist activities in Taiwan following an earthquake.
• E-commerce platform revenue decreased by 12.9% in 2024 due to adjustments in product offerings, including the temporary cessation of fruit import business.
• Discontinued NFT-related services in 2024 due to numerous controversies and unclear regulations in the NFT market.
• The company reported a working capital deficit of US$4,368,050 as of December 31, 2024, with total current liabilities exceeding total current assets.

Risks

• Growth may not be sustainable and depends on the ability to retain existing customers, attract new ones, and increase processed volumes and revenue.
• Failure to continuously improve operational, financial, and internal controls to manage growth effectively could materially and adversely affect the business.
• Success depends on the ability to develop products and services that keep pace with rapid technological changes and evolving markets; failure to do so could adversely affect the business.
• International expansion subjects the company to significant challenges, uncertainties, and risks, including increasing obligations to comply with diverse laws, rules, regulations, and policies of various jurisdictions.
• Faces substantial and increasingly intense competition worldwide, including from unregulated or less-regulated companies and those with greater financial and other resources.
• Has a new business model and a short operating history in developing and rapidly evolving markets, making it difficult to evaluate future prospects.
• Selective investments in new products and services, especially in areas with little prior experience, may not be successful or achieve expected returns.
• Pricing decisions may fail to generate expected results and could adversely affect the ability to attract and retain customers.
• Strategy focused on high-quality, compliant, and secure blockchain-related financial services may not maximize short-term or medium-term financial results.
• Global and regional economic conditions may materially and adversely affect the business, particularly cross-border payments.
• Has incurred operating losses in the past and intends to continue investing, making future profitability uncertain.
• May require additional capital, and financing may not be available on reasonable terms or at all, with existing and future debt potentially containing restrictive covenants.
• A significant amount of business and revenue is derived from a relatively small number of customers, and the loss of these customers could have an adverse effect.
• The requirements of being a public company may strain resources and distract management.
• Financial results may fluctuate significantly and periodically, making period-to-period results volatile and future performance difficult to predict.
• Fluctuations in exchange rates could result in foreign currency exchange losses.
• The nature of the business requires the application of complex financial accounting rules, with limited guidance on certain topics, including digital assets.
• The future development and growth of digital assets, particularly stablecoins, are difficult to predict and evaluate; if adoption does not grow as expected, the business could be adversely affected.
• Unfamiliarity and negative publicity associated with the blockchain economy may reduce customer confidence in stablecoin payment services or digital asset wallet products.
• May encounter technical issues with digital asset integration and changes/upgrades to underlying networks, which could adversely affect the business.
• Holds stablecoins and other digital assets for business operations and is subject to the risks associated with such digital assets, including price volatility.
• Depositing and withdrawing digital assets into and from products involve risks, which could result in loss of customer assets, disputes, and other liabilities.
• The status of a particular digital asset, product, or service as a security in any relevant jurisdiction is highly uncertain; mischaracterization could lead to regulatory scrutiny, fines, and penalties.
• Business interruptions or systems failures, including disruptions in supported blockchain networks, may impair service availability, result in customer or fund loss, or otherwise adversely affect the business.
• Inability to ensure that services interoperate with various operating systems, software, hardware, and web browsers could materially and adversely affect the business.
• Products and services may not function as intended due to errors in software, hardware, and systems, product defects, security breaches, incidents, or human error, which could materially and adversely affect the business.
• Obtains and processes large amounts of sensitive customer data; any real or perceived improper use, disclosure, or access to such data could harm reputation and business.
• Cyberattacks and security vulnerabilities could result in serious harm to reputation, business, and financial condition.
• May not be able to obtain or maintain relevant regulatory licenses, permissions, or registrations, potentially leading to fines, penalties, or forced discontinuation of operations.
• Subject to AML, CTF, and sanctions regulations; failure to comply may lead to administrative sanctions, criminal penalties, and/or reputational damage.
• Subject to regulatory oversight and enforcement by authorities regulating financial services, with important obligations and restrictions.
• Subject to extensive regulations and supervision by agencies enforcing consumer protection laws; changes in regulations could adversely affect financial condition and results of operations.
• Subject to complex and evolving regulations and oversight related to data protection, privacy, and information security.
• Provision of virtual currency-related services may be subject to a highly evolving regulatory landscape, and changes could adversely affect prospects or operations.
• Reliance on collaborations, joint ventures, or strategic alliances with third parties; failure to establish/maintain these or if third parties fail to deliver services could adversely affect the business.
• Dependence on direct and sponsored membership in payment networks and compliance with rules, or relationships with sponsoring financial institutions; changes could harm the business.
• Reliance on bank relationships for payments and custodial services; loss of a critical relationship could adversely impact the business.
• Reliance on AWS, a third-party cloud system, for computing, storage, and other services; any service interruption could disrupt operations.
• Dependence on major mobile operating systems and third-party platforms for product distribution; interruptions or deterioration in relationships could negatively impact the business.
• Taiwan subsidiaries are subject to restrictions on paying dividends or making other payments to the parent company.
• Taiwan subsidiaries are subject to foreign exchange control imposed by Taiwan authorities.
• May be required to obtain approvals from the Taiwan authority for investment in Taiwan subsidiaries if PRC person shareholding reaches a certain threshold.
• Cross-Straits relationship imposes macroeconomic risks which could negatively affect the business.
• Direct listing differs significantly from an underwritten initial public offering; the impact of brand awareness and investor recognition on demand is unpredictable, and marketing efforts may not be successful.
• Trading prices of Class A Common Shares are likely to be volatile, which could result in substantial losses to holders and subject the company to litigation.
• An active, liquid, and orderly trading market for Class A Common Shares on Nasdaq might not develop or be sustained.
• Investors in Class A Common Shares may be unable to bring claims under Sections 11 and 12(a)(2) of the Securities Act due to tracing requirements, limiting available remedies.
• Certain shareholders have different contractual lock-up agreements or other restrictions on transfer from what is customary in an underwritten IPO, potentially causing the trading price to decline.
• May not be able to meet each of the quantitative requirements of the Nasdaq Global Market's Market Value Standard for direct listings.
• If equity research analysts do not meet expectations, do not publish research, or issue unfavorable commentary, the price of Class A Common Shares could decline.
• Issuance of additional share capital in connection with financings, acquisitions, investments, or equity incentive plans will dilute all other shareholders.
• As an emerging growth company, reduced reporting and disclosure requirements may make Class A Common Shares less attractive to investors.
• As a foreign private issuer, reliance on exemptions from certain Nasdaq corporate governance standards may afford less protection to holders of Class A Common Shares.
• As a controlled company, reliance on exemptions from certain Nasdaq corporate governance rules may afford less protection to holders of Class A Common Shares.
• Does not intend to pay dividends for the foreseeable future; ability to achieve a return on investment will depend on appreciation in the price of Class A Common Shares.
• Shareholders may face difficulties in protecting their interests, and the ability of U.S. authorities to bring actions against the company may be limited in foreign jurisdictions.
• As a Cayman Islands holding company, depends on subsidiaries for cash to fund operations and expenses, which may be restricted.
• Cayman Islands law differs from U.S. law and may afford less protection to shareholders.
• May be or may become a passive foreign investment company (PFIC), which could result in adverse U.S. federal income tax consequences to U.S. investors.

Future Outlook

The company expects increased market adoption of stablecoins to enhance its OwlPay services and strengthen its position in digital asset payments. Plans include expanding OwlPay Wallet Pro to support more blockchains (e.g., Base) and diversifying stablecoin offerings for broader conversion corridors and foreign exchange. It also aims to integrate card networks like VISA Direct for individual customer services. The blockchain-powered payment business is anticipated to be the primary driver of future expansion, supported by organic growth through collaborations, strategic acquisitions, and expanded regional licensing. While marketing, sales, and R&D expenses are expected to increase in absolute terms, they are projected to decrease as a percentage of revenue long-term. Current cash, expected cash inflow from payment business expansion, new revenue streams, and 2025 private placement financing are believed to provide sufficient liquidity for at least the next 12 months.

Management Comments

• Our mission is to use blockchain technology to provide businesses with more reliable and transparent data management, to reinvent global flow of funds for businesses and consumers and to lead the digital transformation of business operations.
• We believe in the power of blockchain technology and have focused on leveraging it to optimize and in some cases transform the way enterprises operate.
• We believe our payment business powered by blockchain technology will be the most significant driver of our future business expansion plans.
• We believe OwlPay Harbor and OwlPay Wallet Pro would enhance the breadth of our OwlPay services and strengthen our market position in digital asset payment solutions.
• We further believe our expansion into new products and markets from our current customer-centric businesses will enable us to capture cross-selling opportunities with our existing relationships in the e-commerce and hospitality industries, and to grow into a comprehensive cross-border payment solution suite and business ecosystem.
• We believe that cross-border payment dynamics are robust.
• By offering modernized, streamlined end-to-end payment solutions, we believe that we are well-positioned to capitalize on our early mover advantage in the blockchain-enabled payment industry to capture a meaningful share of the growing B2B and B2C markets.
• We believe the following competitive strengths contribute to our success and differentiate us from our competitors: Early mover advantage in the payment industry. Our global licensing infrastructure. Our AML and cybersecurity capability. Our understanding of blockchain technology and its diverse applications. Our platform in business services.
• We believe our experience with the e-commerce and hospitality sectors has the potential to provide a network of established customers and market players who are an initial market for our payment products and services.
• We believe this will allow us to expand faster and at lower cost than entities that lack an established customer base.
• We believe the combination of our various service offerings will create the potential for a diverse and recurring revenue stream through our payment business, where payment volume is endogenously generated and captured within our OwlTing Group ecosystem.
• We believe OwlPay is one of the first movers in this space and has successfully developed of a platform using stablecoin as an efficient means of settlement for our primary customers, such as international e-commerce platforms and OTAs.
• We believe the stablecoin-based payments market will continue to expand, and we plan to continue to grow and develop our conversion services offerings with more stablecoins, including EURC, ZUSD, and GYEN.
• We put great emphasis on complying with these regulations and aim to operate with the highest standards of integrity and transparency, providing secure and reliable service to our investors and customers.

Industry Context

The global payment industry is experiencing significant growth, with transaction value reaching US$1.8 quadrillion and revenue exceeding US$2.4 trillion in 2023, projected to grow to over US$3.1 trillion by 2028. Cross-border transactions, a key focus for OBOOK, generated an estimated US$288 billion in revenue in 2023, a 20% increase year-over-year. The B2B cross-border payments market alone accounted for approximately US$210 billion in 2023, with strong growth in North America, Latin America, EMEA, and Asia-Pacific. The remittance (C2C) market is also expanding, valued at US$50 billion in 2023 and expected to reach US$135.7 billion by 2033, driven by inefficiencies in traditional systems. The fintech blockchain market is rapidly expanding, estimated at US$4.7 billion in 2024 and projected to reach US$31.8 billion by 2029, with North America leading and Asia Pacific showing high CAGR. Digital asset wallets are also growing, from US$1.5 billion in 2023 to US$3.7 billion by 2033. Stablecoins, particularly USDC, are gaining significant traction, with USDC accounting for 50% of total transactions and US$456 billion in volume in a single week in early 2024, highlighting their role as a bridge between traditional and blockchain payment systems. Latin America shows high adoption of digital currencies, including stablecoins, for payments. Japan's B2B payment market is also expected to grow significantly. OBOOK aims to capitalize on these trends by offering modernized, streamlined, and cost-effective blockchain-enabled payment solutions.

Comparison to Industry Standards

• OBOOK Holdings is ranked among the top 2 global players in the Enterprise & B2B category by CB Insights' latest Stablecoin Market Map, achieving a Mosaic score of 832, which highlights its strong market positioning and growth potential in the enterprise stablecoin ecosystem.
• OwlPay's stablecoin-based payment capabilities are designed to offer lower processing costs and faster settlements compared to traditional intermediary banking methods, which are noted for high processing costs and delayed settlements in the hospitality sector and broader cross-border transactions.
• The company positions itself as an early mover in the blockchain-enabled payment industry, aiming to capture a significant share of the growing B2B and B2C cross-border payment markets by offering modernized, streamlined end-to-end payment solutions.
• In the remittance market, where the average cost of sending US$200 globally was 6.4% in Q4 2023, OwlPay aims to provide low-cost transfers with stablecoins, addressing a key pain point for consumers.

Management Changes

Corporate Governance

Legal Proceedings

• Currently not a party to any material legal or administrative proceedings.
• May from time to time be subject to various legal or administrative claims and proceedings arising from the ordinary course of business.

Related Party Transactions

• Borrowings from Chun-Kai Wang (Darren Wang), founder, chairman, and CEO, amounted to US$1,243,058 as of December 31, 2024. These are interest-free loans subject to automatic annual extension.
• Borrowings from Chung-Han Hsieh (John Hsieh), co-founder, director, and CTO, amounted to US$470,000 as of December 31, 2024. These are interest-free loans subject to automatic annual extension.
• Key management personnel purchased 230,081 Class A Common Shares for a total cash consideration of US$1.62 million in 2024.
• Key management personnel have provided real estate as collateral for the company's long-term borrowings.
• Other payables to Darren Wang were US$10,332 as of December 31, 2024.
• Other receivables from Darren Wang were US$0 as of December 31, 2024.

Stakeholder Impact

• Shareholders: Face potential dilution from future equity issuances and will rely on share price appreciation for returns as no dividends are planned. May experience less protection due to the company's foreign private issuer and controlled company status, and face volatility risks from the direct listing process.
• Employees: Benefit from equity-based compensation plans (Share Incentive Plan) and potential for increased hiring in R&D and sales/marketing. Key management personnel are subject to non-competition clauses.
• Customers: Will benefit from enhanced payment solutions through OwlPay, offering broader payment options (fiat, stablecoin) and improved cross-border transaction efficiency. However, they face risks of service interruptions, data breaches, or regulatory changes affecting service availability.
• Suppliers: May benefit from cross-selling opportunities for payment solutions to existing OTAs and e-commerce platforms.
• Creditors: Existing credit facilities and senior notes contain covenants, and any future debt financing may impose additional restrictions on the company's operations.

Next Steps

• Class A Common Shares are expected to begin trading on the Nasdaq Global Market as soon as practicable after the registration statement becomes effective.
• Continue to expand OwlPay business operations organically by leveraging existing and future business collaborations.
• Explore strategic acquisitions and transactions to expand payment network and customer base.
• Expand regional licensing and approvals to operate in additional jurisdictions, including remaining U.S. states, Japan (fund transfer and stablecoin licenses), Singapore (major payment institution license), Hong Kong (money service operator license), and upgrading to CASP under MiCAR in the EU.
• Plan to further expand to Brazil, Argentina, and other markets in South America.
• Expand OwlPay Wallet Pro services to support more blockchains, including Base, and diversify stablecoin offerings for broader conversion corridors and foreign exchange transactions.
• Further develop and release services for individual customers integrating payment services offered by card networks, such as VISA Direct.
• Continue investing in sales and marketing to expand the customer base and enhance brand awareness.
• Continue to hire specialized research and development employees, invest in technology infrastructure, and work on research projects.
• File a registration statement on Form S-8 under the Securities Act to register shares subject to equity compensation plans.
• Keep the registration statement effective for a period of at least 90 days after its effectiveness.
• File an annual report on Form 20-F within four months of the end of each fiscal year and publish results semi-annually through press releases furnished to the SEC on Form 6-K.
• Redeem all remaining Class A Preferred Shares within two months after the official listing, using funds raised from the capital markets.

Key Dates

Recommendation

OBOOK Holdings operates in a high-growth, innovative sector with significant market opportunities, particularly in blockchain-powered cross-border payments. Its early-mover advantage, expanding global licensing infrastructure, and strategic collaborations with major financial and digital asset players are strong positive indicators for long-term potential. However, the company is currently unprofitable, reporting increasing net operating losses and total comprehensive losses in 2024, alongside a working capital deficit. The direct listing process itself carries inherent volatility and uncertainty, and the dual-class share structure with concentrated control by the CEO may deter some institutional investors. Given the blend of high growth potential and significant financial risks, a 'Hold' recommendation is appropriate. Investors should monitor the company's ability to translate its strategic investments and market position into sustainable profitability and navigate the complexities of its public listing and evolving regulatory landscape.

Keywords

Blockchain Technology, Payment Solutions, Stablecoin, Cross-border Payments, Fintech, Hospitality Software, E-commerce, Nasdaq Direct Listing, Money Transmitter Licenses, Digital Assets, Corporate Governance, Risk Management