IPO Watch: It’s out with the old, in with the new as ARMnet eyes listing for ‘iPaas’ tech platform
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After a strong year for tech IPOs in 2019, another software company is set to join the ASX boards later this month.
IT platform ARMnet (ASX:AR1) is seeking to raise $11m from investors at 20c per share, which will give it a listing valuation of around $30m.
The company’s arrival will mark another step in an ongoing shift towards tech as part of the broader composition of the ASX.
ARMnet’s product offering is similar to the software-as-a-service (SaaS) business model that most local investors understand — but with a twist.
Rather than customer-facing software, its focus is on efficiency improvements in back-end IT systems — known as integrated-platform-as-a-service (iPaas).
Like a SaaS platform the iPaas offering is “delivered through the cloud, and is highly scalable”, the company says in its prospectus.
The core premise of iPaas is to streamline back-end IT systems which are often run on multiple pieces of software that don’t have the capacity to share data due to legacy technology systems.
Integration software aims to solve the problem by extracting data and fostering a simpler exchange of information across the client’s intra-company systems.
On some occasions once the existing data has been migrated and integrated on new software platforms, the old data storage systems can then be turned off.
The product is targeted primarily at financial services firms, which often utilise “multiple systems across a wide range of functions” which “will not or often cannot talk to each other. This creates delays, costs and errors”, ARMnet said.
The company’s customer base includes companies such as Sydney-based Bluestone Asset Management and Canadian mortgage group Paradigm Quest. Across the portfolio, ARMnet serves around 40 clients and says its software is used to help manage around $100bn assets.
As part of the listing process, the newly public ARMnet vehicle will acquire Axcess Consulting Group (owner of the ARMnet software platform) for $4m.
Other funds will be deployed towards working capital, beefing up the sales team and establishing new offices in the UK and North America.
So far in 2020 a total of three companies have listed publicly, with early performances led by software platform Cosol (ASX:COS), which raised $12m at 20c a share on January 23 and closed last night at 34c.
Here’s a performance rundown of this year’s ASX entrants:
Another nine companies have flagged IPOs in early 2020, five of which are junior minerals explorers:
Here’s a list of upcoming IPOs: