The Toronto Star has published quite a bit of information about this week’s Big New Service, Lemontronic.
Lemontonic raised some $5.5 million (Canadian) from investors in a recent private-placement offering, but expects to spend $4 million this year on marketing and advertising — the key to getting people to the Web site in the first place.
The company posted a net loss last year of $2 million, or 16 cents a share, compared to a loss of $807,969 or 6 cents a share in 2002. It is forecasting breakeven cash flow in the next 18 months, with profitability to follow shortly thereafter.
Lemontonic’s shares, which trade on the TSX Venture Exchange, have never broken above $1. In the last year they’ve gained traction, rising from as low as 4 cents to as high as 71 cents, but volume is scant.
Pavan’s own research suggests the lifetime value of one customer is somewhere in the $160 range. The cost to acquire, service and pay for the infrastructure, bandwidth, servers and other operational costs is somewhere around $110 per customer, leaving a net profit of around $50 a head — not bad for a company with minimal other overhead costs.
Lemontonic has around 15 full-time employees. The bulk of its operations are outsourced to a company called Fusepoint, which manages all of its hosting and server application
Some 37 per cent of singles browsed online personals in 2003. Twenty three per cent of those posted their online profile and 10 per cent actually dished out cash for a subscription — roughly one in four browsing singles. “It’s the largest category of paid content online,” said Elliott.
