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3 exciting ASX small cap tech shares to watch in 2019

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It wasn’t that long ago that the likes of Afterpay Touch Group Ltd (ASX: APT), Altium Limited (ASX: ALU), and Appen Ltd (ASX: APX) were small cap tech shares flying under the radar of most investors.

Today they are multi-billion-dollar companies featuring in countless portfolios across the country and have generated incredible returns for their long-term shareholders.

While not all small cap tech shares are destined to replicate this success, I believe there are a few that have significant growth potential that could make it worth investigating them further.

Three worth keeping a close eye on are listed below:

LiveTiles Ltd (ASX: LVT)

LiveTiles is a digital workplace platform provider that I think is worth keeping a close eye on. It was a strong performer in FY 2018 and has carried this form through to FY 2019. Last month the company advised that it had more than tripled its annualised recurring revenue (ARR) over the last 12 months to $22.9 million. This growth is likely to bolstered with the acquisition of leading plug and play, Microsoft-aligned digital workplace software business Wizdom. This acquisition will enable LiveTiles to deliver new capabilities in relation to news and content publishing and has opened the door to the lucrative European market. Wizdom currently counts the likes of Nokia, Syngenta, De Beers and Anglo American as customers.

Megaport Ltd (ASX: MP1)

Megaport is a Bevan Slattery-founded provider of elastic interconnection services across data centres globally. This service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements. The benefit here is that these customers don’t need to be tied to fixed service levels on long-term and expensive contracts and can just use what they need when they need it. Earlier this week Megaport released its half year results and revealed a 72% increase in revenue and a 70% lift in monthly recurring revenue (MRR). Due to the cloud computing boom I believe Megaport is well-positioned to continue this above average growth for some time to come, making it one to watch.

Over The Wire Holdings Ltd (ASX: OTW)

Over The Wire is a telecommunications, cloud, and IT solutions provider which has been growing at an impressive pace. In FY 2018 the company grew revenue by 57%, EBITDA by 66%, and earnings per share by 53%. Whilst some of this growth was driven by acquisitions, organic growth was a solid 20% for the year. Pleasingly, demand for its services remains robust and management has forecast another year of strong growth in FY 2019.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, and Appen Ltd. 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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