Bailador adds $10 million to investment in fintech DASH to fund acquisition

Bailador invests a further $10 million in fintech DASH Technology Group
DASH will use the funds to acquire another investment management platform IPS
Bailador has recently been deploying capital to new and existing companies

Special Report: Tech-centric capital fund Bailador Technology Investments will invest a further $10m in DASH Technology Group to fund a new acquisition for the fintech.

Bailador Technology Investments (ASX:BTI) added DASH to its portfolio of 10 technology companies in July 2024 by making a $20m investment commitment and will now invest a further $10m.

DASH is a cloud-based financial advice and investment management platform used by advisors to operate more efficiently, and by large enterprises to automate the delivery of digital financial advice to their large customer bases.

BTI’s latest investment is structured as a $5m equity investment and a repayable $5m debt facility and will fund its acquisition of Integrated Portfolio Solutions (IPS).

Founded in 2012, IPS combines technology and service to streamline portfolio administration and reporting through its non-custodial, ‘whole-of-wealth’ platform.

It is used by investment advisers, family offices, financial planners and ultra-high-net-worth individuals and administers more than $10bn of investment portfolios, which will now fall under the DASH brand.

BTI said the entire IPS team would join the DASH business, including key IPS and industry executives Darryl Johnson and Mark Papendieck.

‘Reducing price of financial advice’

BTI’s co-founder David Kirk and Partner James Johnstone joined DASH’s board as part of BTI’s original investment.

Johnstone said DASH was democratising financial advice by using innovative technology to make access to financial advice more affordable.

“By reducing the cost and time of onboarding, establishing a fit-for-purpose investment strategy, building a portfolio and then managing the portfolio, the overall price of financial advice will reduce,” he said.

“Dash is giving more people access to expert advice on how to create and build wealth for a comfortable retirement,” he said.

DASH reports strong FY24

In September DASH announced its FY24 financial results, achieving 50% YoY revenue growth, which BTI said was almost twice the FY2024 industry average of 26%.

DASH reported both platform and software revenue performed well, growing 56% and 33% respectively. BTI said the business was targeting profitability over the short term.

While DASH made a loss in FY24, its result was a 42% improvement on FY23 as the company benefits from the operating leverage that is inherent in its business model.

Strong revenue model

DASH generates revenue from two main sources:

Software revenue from recurring licence fees charged to financial advisers and institutions.
Platform revenue related to use of and activity on DASH’s investment management platform. This consists of administration fees, cash management fees and transaction fees.

Image Source: BTI

“DASH has a very attractive revenue model as the platform earns fees on the funds under administration it holds, as well as from licence fees for access to the platform,” said Johnstone.

“DASH now has $15bn in funds under administration and that will continue to grow organically with the superannuation guarantee and by attracting financial advisors from legacy platforms.”

Johnstone said as FUA grows – either through financial advisers gaining more clients, asset appreciation, or contribution – DASH’s platform revenue increases, even without acquiring new customers.

‘Serves the full financial planning spectrum’

Kirk said DASH operated in the fast-growing $1tn investment platform and financial advice software market.

He said the business was led by an experienced executive team who have previous success building software businesses in the wealth management space.

“DASH’s technology platform is the youngest in the market,” he said.

“It offers financial advisors a solution that allows them to automate their workflows and increase their business’ profitability.

“The IPS acquisition will extend this philosophy further into the high networth individual segment.”

Kirk said as DASH business enters FY2025 well positioned to execute its organic growth plans and leverage its unique position in the growing wealth management industry.

Bailador boosting investments

BTI recorded a strong FY24 with cash back to target levels, dividend stability, robust operating performance of its portfolio and conservatively valued investments with valuation upside potential.

The company has been deploying capital to new and existing companies and recently announced a $3m follow-on investment in Rosterfy.

The a SaaS platform enables not-for-profit organisations, government bodies and mass-scale sports and events to recruit, screen, train and schedule their volunteer communities.

The platform is used to organise major global events such as the Australian Open and the Superbowl.BTI said the valuation of the investment round has resulted in a 14% ($1.7m or 1c/share) uplift to the valuation of BTI’s existing $12.4m investment in Rosterfy.

BTI’s additional investment brings the total investment valuation to $17.1m.

“Rosterfy has performed very well since our investment in April 2023, and we had already increased the valuation of our investment in Rosterfy by 27% in April of this year,” Kirk said.

“The Rosterfy team have developed a market-leading volunteer management solution, and we are excited to be partnered with them as they execute on their mission to connect communities to events and causes they are passionate about.”

In August BTI announced it was investing $7.7m in fitness studio management software platform Hapana.

The company also invested $20m in Updoc, connecting consumers who need medical services with registered health practitioners via a telehealth platform.

This article was developed in collaboration with Bailador Technology Investments, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.