Revenue Model
GRACE NET Revenue model
GRACE NET adheres to the subscription-based revenue model with elements of the affiliate and reseller models. This applies to both its B2B and B2C offering.
Subscription fees - B2B
In the first two years of operation, the bulk of GRACE NET’s revenue will come from selling its signature enterprise data solution. The subscription fee is calculated based on the required bandwidth and can reach $100,000 for a mid-sized business in the first year of use , which is still considerably more affordable than competing solutions like IBM Aspera.
Following the industry’s best practices, B2B customers pay the initial installation and license fee that covers the use for the first 12 months, followed by smaller (around 50-60% of the initial fee) license renewal payments. The annual nature of payments ensures reduced churn rates (as the fee is not refunded if a client stops using the solution).
The company should begin generating B2B revenue around March 2025, after the completion of the crucial reverse-engineering protection module makes it safe to ship the data transfer driver to customers.
According to the financial model, the project expects to earn circa $2.77 million in direct B2B license payments in the first year, and $8.73 million in the second year, together with $1.38 million in license renewal fees.
B2B reseller network and White Label
At the start of Year 2, GRACE NET will launch two reseller programs:
Regular reseller network: a reseller pays GRACE NET $60,000 in initial licensing fees for each B2B client they attract and keeps the rest; in subsequent years, the reseller pays GRACE NET $30,000 in license renewal fees for each B2B customer that renews their subscription.
Exclusive regional distributor network: an entity (e.g. a large telecom company) will need to pay GRACE NET a reasonably large one-time fee (TBA, starting from $200,000) to acquire exclusive white-label distribution rights in a region or country. The regional reseller will be able to keep up to 50% of the license fees collected from the B2B clients they onboard.
In Year 2, the regular reseller network should yield significantly more revenue than direct B2B sales ($15.55 million vs. $8.73 million, as per the financial model). The fist exclusive regional distributors should be onboarded by the end of Year 2.
Subscription fees - B2C
Users of the upcoming GRACE CONNECT app will pay $4-5 a month for the mobile data speed booster - a solution that speeds up mobile internet by 30-50%. The fee is charged monthly, and a 10% discount is available when paying with $GRACE tokens.
In the first year of operations, B2C offerings will play a secondary role awaiting the deployment of a network of 32 server hubs that will ensure global coverage. Starting from Year 2, B2C revenue will begin catching up with B2B revenue, especially as the B2C reseller network begins to expand.
According to the financial model, GRACE NET expects to generate just $400,000 in direct (non-reseller) B2C sales in Year 1, followed by $3.6 million (an 8x increase) in Year 2 and $7.9 million in Year 3.
White Label/Reseller network revenue - B2C
The reseller network for the B2C app GRACE CONNECT will consist of two types of resellers: KOLs and Exclusive Regional Distributors.
KOLs (the majority in terms of number), who will receive a commission of 10-20% on the app usage fees generated by their referrals. A single KOL can attract between 20 and 40 app users a month, which won’t result in much reseller revenue, but the first wave of B2C users acquired through a KOL with a large following can be considerable.
The revenue generated through KOL resellers is not expected to exceed that generated through direct sales.
Exclusive regional distributors, who will participate in the B2C app promotion and distribution as a secondary activity after B2B sales.
As per the financial model, GRACE NET should generate $0 in B2C reseller revenue in Year 1, $2.25 million in Year 2, and $3.38 million in Year 3.
| B2B direct, initial license, USD | B2B direct, initial license, % | B2B direct, license renewal, USD | B2B direct, license renewal, % | B2B resellers, initial license, USD | B2B resellers, initial license, % | B2B resellers, license renewal, USD | B2B resellers, license renewal, % | B2C direct, USD | B2C direct, % | B2C reseller, USD | B2C resellers, % | Total, USD | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year 1 | $2 772 000,00 | 87,3% | $0 | 0,0% | $0 | 0,0% | $0 | 0,0% | $402 300,00 | 12,67% | $0 | 0,00% | $3 174 300 |
Year 2 | $8 736 000,00 | 27,5% | $1 386 000 | 4,4% | $15 552 000 | 49,0% | $0 | 0,0% | $3 609 450,00 | 11,38% | $2 256 000 | 7,11% | $31 719 450 |
Year 3 | $7 056 000,00 | 12,1% | $0 | 0,0% | $28 920 000 | 49,4% | $6 786 000 | 11,6% | $7 894 530,00 | 13,48% | $3 798 000 | 6,49% | $58 553 530 |
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