When Dexit Inc., the company that wants its cards to replace cash for small purchases, had its initial public offering a year ago, Canadian Business said it would have to “expand like crazy” (read story here) in order to succeed. Since then, the company's stock has dropped 64%; it's now trading at about $2. Pocket change.
But the company has expanded. It now has more than 500 locations in Toronto, up from 264 a year ago. And Dexit can now be found outside the downtown core. Dexit founders were inspired by Esso's Speedpass and the Starbucks card, which allow customers to quickly get through the pump or till. Why have all the cards, they reasoned, when one could do the trick?
So far, though, Dexit doesn't seem to be stopping companies from launching their own cards. Tim Hortons is testing a Tim Card at its Oakville locations and in the Rogers Communications head office (where this magazine is published).
Last month, Second Cup launched a Convenience Card in Edmonton that it plans to roll out across the country in the fall. But in Toronto, there are 18 Second Cup locations that currently offer Dexit. Whether Dexit will be kept on is up to the owners of individual franchises.
Despite losing $2.3 million on just $788,000 in revenue in the first quarter of 2005, the company remains optimistic. At its AGM in June, CEO Renah Persofsky said Dexit plans to expand into foreign markets, and can expect sales of $15 million for every 1% it snags of the “everyday purchases under $10” market. But since the meeting, Dexit's stock has fallen almost 20%. It seems investors aren't convinced.