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Are these small cap ASX shares future tech stars?

They might be multi-billion companies now, but that wasn’t always the case for Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX).

Just a few years ago they were small cap ASX shares flying under the radar of most investors. Anyone that invested in their shares at that point and held onto them today, will have made a small fortune.

With that in mind, I thought I would pick out two small cap ASX shares which I feel could be future stars. Here’s why I think they should be on your watchlists right now:

ELMO Software Ltd (ASX: ELO)

The first small cap ASX tech share to watch is this cloud-based human resources and payroll software company. ELMO provides users with a unified platform that streamlines processes such as recruitment, on-boarding, learning, and payroll.

It has a $2.4 billion market opportunity in the ANZ region and the potential to expand globally in the future thanks to its platform being jurisdiction agnostic. One market the company has its eyes on is the UK, which it estimates to be worth ~$6.8 billion.

Whispir (ASX: WSP)

Another small cap ASX share to add to your watchlist is Whispir. It is a software-as-a-service communications company which provides an industry-leading software platform. This platform allows users to deliver actionable two-way interactions (SMS, voice messages, email) at scale using automated multi-channel communication workflows.

During the first half of FY 2020, Whispir’s annualised recurring revenue grew by an impressive 22% to $36.7 million. The good news is that since then, the pandemic has accelerated demand for its platform due to the work from home initiative. This looks likely to lead to Whispir delivering an even stronger full year result in August.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

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 Whispir Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended Elmo Software and Whispir 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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