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3 exciting tech shares on my watchlist


I think the Australian share market is home to a good number of small cap tech shares with the potential to grow significantly in the future.

While they may not necessarily be ready for an investment today, unless you have a very high tolerance for risk, I certainly think they are deserving of a place on most watchlists.

Three to watch are listed below:

ELMO Software Ltd (ASX: ELO)

This leading provider of integrated cloud-based human resources and payroll software solutions could be well worth a closer look. I’ve been very impressed with its performance over the last 18 months and believe ELMO still has a long runway for growth ahead of it. In FY 2018 ELMO achieved pro forma revenue of $31.9 million and pro forma SaaS revenue of $29.8 million. This was a 36.4% and 37.2% increase, respectively, on the prior year and smashed management’s guidance. The good news is that this is still only a small slice of the addressable market in Australia and New Zealand estimated to be worth upwards of US$770 million per year by management.

LiveTiles Ltd (ASX: LVT)

Another tech share growing strongly is LiveTiles. It is a digital workplace platform provider with a focus on the artificial intelligence market. The LiveTiles platform provides solutions that are intuitive, customisable, and can offer businesses ways to increase collaboration and efficiency amongst their employees. In FY 2018 the growing popularity of the product led to its annualised recurring revenues increasing by 275% to $15 million. I expect similarly strong growth in FY 2019 thanks to its partnership with Microsoft and the engagement of a dedicated sales force.

Serko Ltd (ASX: SKO)

Serko is a recent addition to the Australian share market so possibly flying under the radar for a lot of investors. Serko offers an online booking tool that provides clients with access to a wide variety of travel providers including low cost carriers. The company recently signed a letter of intent with travel agent giant Flight Centre Travel Group Ltd (ASX: FLT) to develop unique product offerings based on Serko’s travel management technology. As a result of this and growing demand for its services, management expects revenue growth for FY 2019 in the range of 20% to 30%.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

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*Returns as of 6/8/2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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