For the past 18 years in Australia management consultant Deloitte has put together a list of the “fastest growing” tech companies either listed or unlisted, with the majority of names on the list being companies most ‘mum and dad’ share market investors will never have heard of.
The companies are ranked by their revenue growth over the past three years between 2016-2018
Some of the little known unlisted tech companies growing revenue at amazing rates over the past three years include Mate Communications (growth of 3,703%), Vamp (growth of 1,285%), Koala (growth of 1,022%) and Youfoodz (growth of 498%).
The fastest growing companies can be some of the best performing in terms of investing returns if those companies are able to maintain their growth pace over a 3 to 5 year period or more.
Deloitte also named two companies on the ASX that operate in the popular software-as-a-service (SaaS) that helps companies generate revenues on a recurring basis in a business model that lends itself to growth.
So let’s take a look at them.
Catapult Group International Ltd (ASX: CAT) has grown its revenue 342% over the past three years according to Deloitte and is number 18 out of 50 fast growing companies.
However, the share price is down around 31% over the same period after investors grew disappointed at the company’s inability to control costs and after a series of dilutive capital raisings at ever lower prices.
Catapult is a market leader in the sports and data analytics space using a SaaS model that sees professional sports teams subscribe to its products. It’s also attempting to sell its devices to amateur sports teams and athletes in what is a large addressable market.
The shares look reasonably cheap on a price-to-sales basis versus nearly all of its listed competitors in the listed SaaS space and may offer investors good value.
ELMO Software Ltd (ASX: ELO) has grown its revenue 118% over the past three years and ranks 42 out of 50 on Deloitte’s list of fastest growing tech companies. ELMO sells human resources-based software-as-a-service to medium to large-sized businesses in Australia. Clients include Cbus, City of Darwin, Clayton Utz, and Red Cross New Zealand. In financial year 2019 it is forecasting EBITDA of $1.1 million on revenue around $39.5 million.
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Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Catapult Group International Ltd and 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.