If you're a big fan of small caps and technology shares, then you're in luck because the Australian share market is home to a number of exciting shares at the small end of the tech sector with significant growth potential.
Here's why I think investors should have them on their watchlists:
ELMO Software Ltd (ASX: ELO)
ELMO is a cloud-based human resources and payroll software company which provides a unified platform to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll. It has been growing at a very strong rate in recent years thanks to a combination of organic growth and the benefits of acquisitions. Due to the quality of its offering and its large market opportunity, I believe it can continue this trend for some time to come.
LiveTiles Ltd (ASX: LVT)
LiveTiles is a digital workplace platform provider aiming to simplify processes and enhance productivity through the creation of internal dashboards, intranet portals, and collaborative online working environments. It also leverages artificial intelligence to assist users in completing the mundane and generic tasks they encounter on a daily basis as quick as possible through the use of bots. Thanks to the engagement of a dedicated salesforce and its close ties with Microsoft, demand for its platform has been growing strongly. Management appears confident this will continue and is targeting annualised recurring revenues of $100 million by the end of June 2021.
Serko Ltd (ASX: SKO)
Serko is an online travel booking and expense management provider which has been an impressive performer over the last couple of years. Thanks to strong demand from new and existing customers, in FY 2019 Serko posted a 28% increase in total operating revenue to NZ$23.4 million. One key metric that stood out for me was its recurring revenue. According to the release, just over 88% of its revenue is classed as recurring. I believe this is a testament to the quality of its service and gives it a great foundation to build on in FY 2020.
