Management consultant and accountant Deloitte Touche Tohmatsu has named Australia's fastest-growing tech companies with several ASX members on the roll call and some future IPO candidates at the top of the list.
The top three are privately held startups Cashrewards, MoneyMe Finanical Group and OpenMarkets Australia.
The winner Cashrewards delivered blockbuster growth of 12,496% over the past three-year recorded period as it thumps the competition in the online shopping space as retailers pay to advertise on its site and Cashrewards then deposits cash back direct to shoppers' bank accounts when they buy goods from the retailers.
Many of the other businesses are in the fintech space with the shift to the cashless society a mega-trend that startups continue to leverage with consumer or business lending startups like MoneyMe and Prospa IPO candidates in the years ahead.
Public companies
Investors will be more interested in those listed on the ASX, with the usual suspects featuring prominently. Let's take a look at them in ascending order.
Ranked 50 – Freelancer Ltd (ASX: FLN) runs the eponymous website that connects employers to freelance workers to complete temporary jobs commonly in the digital space such as website design, SEO optimisation or social media promotion. At the heart of the digital economy Freelancer has an attractive outlook, but faces competition from the likes of U.S. giant Upwork. The stock has fallen back to $1.01 recently as the market worries over the performance of its Escrow.com acquisition.
Ranked 42 – Class Ltd (ASX: CL1) is a fintech business sitting in the growth sweet spot of superannuation and the ageing population as it provides software for SMSFs to manage their portfolios. Deloitte records its three-year growth rate as 128% and the stock has more than doubled in value in less than a year on the ASX boards.
Ranked 39 – Redbubble Ltd (ASX: RBL) is the Melbourne-based website operator that actually earns most of its revenues and profits in North America and Europe. It sells personalised accessories and clothing designed by artists for bohemians and fashion fans looking for alternatives to the egregious consumption of the mainstream. Deloitte records its three-year growth rate at 136%, although the stock has struggled to attract buyers since listing and could be good value at 84 cents.
Ranked 38 – Empired Ltd (ASX: EPD) is the IT services business that Deloitte clocks at posting a 140% three-year growth rate. That's impressive given IT services is a competitive space where fixed staff costs can be high and any business spending downturns may result in profit falls.
Ranked 33 – Bulletproof Group Ltd (ASX: BPF) is another IT services firm heavily involved in the cloud services space with Deloitte recording its three-year growth at 158%. Similarly to Empired these businesses tend to perform well when the going is good, but can struggle if demand for their services turns down due to the relatively high fixed costs.
Ranked 30 – MNF Group Ltd (ASX: MNF) is the voice over internet and broadband services startup that is now attempting to expand overseas. Led by founder and tech wizard Rene Sugo it retains a strong balance sheet, margin-expanding growth horizons and an entrepreneurial verve that makes it an exciting prospect.
Ranked 24 – Mobile Embrace Ltd (ASX: MBE) has a mixed track record as a public company and recently saw its value almost collapse in half after flagging some issues with is Australian telco carrier billing operations. Despite the track record of historical growth it may be one to watch from the sidelines.
Ranked 11 – Vocus Communications Limited (ASX: VOC) has delivered growth of 805% over the past three years according to Deloitte and much of this will be due to its merger and acquisition strategy. Vocus shares have pulled back to $5.40 recently as investors worry over the impact of the NBN, although in my opinion the stock looks good value at these levels. It will hold its AGM on November 29.
Ranked 5 – Hub24 Ltd (ASX: HUB) has delivered three-year growth of 1,248% and the stock has more than quadrupled in value over the period to a record high of $5.75. It provides superannuation or investment platforms and was the subject of a takeover approach from IOOF Holdings Limited (ASX: IFL) in 2015. It remains a takeover candidate given the large number of financial services players that must be keen on its assets and growth potential.
