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Key points
- ASX tech shares are capable of producing a high level of growth
- Bailador is a tech investment fund with holdings of several leading, private businesses with global aspirations
- Audinate is a leader in the AV space. It's widely recognised for its audio services and it's working hard on the video side of the strategy
ASX tech shares have the ability to grow quickly and achieve good profit margins because of the underlying nature of the business.
The recent sell-off in recent weeks and months has opened up some potential opportunities for investors to jump on.
With that in mind, here are two under-the-radar ASX tech share ideas:
Bailador Technology Investments Ltd (ASX: BTI)
This business is a growth capital fund. It is focused on the technology sector, actively managed by an investment team. Bailador gives investors exposure to a portfolio of IT businesses with global addressable markets.
The companies that are within the portfolio are in the 'expansion stage'. Some of the businesses in the portfolio are Siteminder Ltd (ASX: SDR), Straker Translations Ltd (ASX: STG), Instaclustr, Rezdy, Access Telehealth, Standard Media Index and Nosto.
- Siteminder is a world leader in hotel management and distribution for online accommodation bookings.
- Instaclustr is an open source data platform for cloud-based solutions that require very large scale.
- Straker is one of the world's fastest growing digital language translation service providers.
- Rezdy is an online channel manager and booking platform for tours and activities.
- Access Telehealth is a telehealth platform for Aussies to get access to healthcare services.
- Standard Media Index is a big data aggregation and analysis platform with exclusive access to advertising expenditure data.
- Nosto is an AI-powered e-commerce personalisation platform.
Bailador remains committed to a portfolio of around 10 to 12 investments and will be patient in waiting for the right opportunities and rigorous in assessing opportunities.
The ASX tech share typically invests $5 million or more in businesses that are usually run by the founders, are two to six years old, with a proven business model and attractive unit economics, have international revenue generation, are exposed to a huge market opportunity and can generate repeat revenue.
Audinate Ltd (ASX: AD8)
Audinate is a business focused on improving the audio visual experience for clients.
It offers the Dante audio over IP networking solution, which the company boasts is the worldwide leader. It's used by sectors such as professional live sound, commercial installation, broadcast, public address and recording industries.
How does it work? Dante replaces traditional analogue cables by transmitting audio signals to multiple locations at once, using just an ethernet cable.
The ASX tech share is also heavily focused on building up the video side of the business because then it will be able to offer the full AV package to win over clients.
Audinate recently announced the acquisition of the Silex Insight video business. Silex produces video networking products for manufacturers of AV equipment. It has an experienced team of eight engineers, an existing revenue base of approximately US$2.5 million and intellectual property.
Silex's team will complement the UK video team in Cambridge.
In the first quarter of FY22, Audinate made revenue of US$7.6 million, up 46.1% year on year. Demand is at a record high, with backlog orders for chips, cards and modules. However, component shortages are expected in the second half of FY22.
