Over the last few years the likes of Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) have gone from being small caps to multi-billion dollar tech companies.
This means that anyone that was lucky enough to buy shares when they were small caps, and held onto them until today, will be sitting on mouth-watering returns.
I believe this demonstrates why investing in the small cap space can be a very rewarding experience if it goes well. However, it is worth remembering that it doesn't always go to plan. For every Appen and Altium there have been countless other companies that have failed to live up to their potential.
This means it is best to be very careful when investing in the space and only consider companies with strong business models and positive long term outlooks.
Three small caps that tick a lot of boxes for me are listed below. Here's why I like them
Audinate Group Limited (ASX: AD8)
The first small cap tech share to watch is Audinate. It is a $393 million digital audio-visual networking technologies provider which is best known for its innovative Dante product. This award-winning audio over IP networking solution is being used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. The company also has its eyes on the lucrative Audio & Video (AV) market. If it can dominate this market as well, I believe it could have a very bright future ahead of it.
Bigtincan Holdings Ltd (ASX: BTH)
Another exciting small cap share to watch is Bigtincan. It is a $296 million tech company which provides enterprise mobility software to businesses. This software helps to improve mobile worker productivity and has a track record of increasing sales win rates and reducing costs. Users of the software include Australia and New Zealand Banking GrpLtd (ASX: ANZ), Cardinal Health, and Guess.
Whispir (ASX: WSP)
A final small cap to watch is Whispir. It is a $226 million software-as-a-service communications workflow platform provider. It provides businesses with a platform that allows users to deliver two-way interactions at scale using automated multi-channel communication workflows. This can make operations more efficient and reduce the number of service desk support calls. Users of its software include AGL Energy Limited (ASX: AGL), Foxtel, and Disney.
