If you're on the lookout for a little exposure to the small side of the market, then you're in luck.
Right now there are a good number of small cap shares on the Australian share market which I believe have strong long-term growth potential.
Three to add to your watchlist are listed below. Here's why I like them:
ELMO Software Ltd (ASX: ELO)
One small cap share that I think is worth watching very closely is ELMO Software. It is a fast-growing cloud-based human resources and payroll software company. It provides a unified platform that allows users to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll. It has been a strong performer over the last couple of years and I remain confident it is well-placed to continue this positive form in FY 2020 and beyond.
Serko Ltd (ASX: SKO)
Another small cap share to watch is Serko. It is an online travel booking and expense management provider which has been growing at a very quick rate over the last couple of years. For example, in FY 2019 Serko experienced strong demand from new and existing customers, leading to an impressive 28% increase in total operating revenue to NZ$23.4 million. The good news is that the company has started FY 2020 on a very positive note. It recently revealed that it is on track to achieve its operating revenue growth guidance of 20% to 40%. Another positive is that it has just raised significant funds to accelerate its growth.
Volpara Health Technologies Ltd (ASX: VHT)
A final small cap share to watch is Volpara. It is a provider of healthcare software that leverages artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. As with the others, Volpara has been growing at a very strong rate over the last few years. This has been driven by its increasing market share in North America. Due to the growing popularity of its software with radioligists and recent acquisitions, I expect this positive form to continue for the foreseeable future.
