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4 top small cap ASX shares to watch in FY 2021

If you’re interested in getting a little exposure to the small side of the Australian share market, then you might want to take a look at the shares listed below.

I believe these four ASX small cap shares have very bright futures ahead of them. Here’s why:

ELMO Software Ltd (ASX: ELO)

The first small cap ASX share to watch is ELMO Software. It is a cloud-based human resources and payroll software company which provides users with a unified platform. This platform streamlines processes such as recruitment, on-boarding, learning, and payroll. It has an estimated $2.4 billion market opportunity in the ANZ market and the potential to expand globally in the future. It appears to have its eyes on a UK market worth ~$6.8 billion.

MNF Group Ltd (ASX: MNF)

Another small cap ASX share to watch is MNF Group. It is a leading provider of Voice over Internet Protocol (VoIP) technology. This technology is used to convert analogue audio signals into digital data that can be sent over the internet. This is essentially using a telephone via the internet. Demand for VoIP services has been growing very strongly this year because of the pandemic and the work from home initiative. I expect this trend to continue in FY 2021.

Nitro Software Ltd (ASX: NTO)

I think Nitro Software is a small cap ASX share to watch. Nitro is a software company that is aiming to drive digital transformation across multiple industries. Its core solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap ASX share to watch is Volpara. Its software uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. It has been a very strong performer over the last few years thanks to the growing popularity of its software with radiologists across North America. I expect this positive form to continue this year, especially with the help of recent acquisitions, which look set to increase its average revenue per user metric materially in the future.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended Elmo Software, Nitro Software Limited, and VOLPARA FPO NZ. 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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