Why the Zoom2u (ASX:Z2U) share price is rocketing 28% higher today

This newly listed share has been on fire again…

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It has been another positive day for the Zoom2u Technologies Ltd (ASX: Z2U) share price on Thursday.

The recently listed delivery management software provider’s shares jumped 28% to a record high of 83.5 cents this morning.

When the Zoom2u share price reached that level, it meant it had gained almost 320% since its IPO last Friday.

Why is the Zoom2u share price storming higher?

The catalyst for the rise in the Zoom2u share price today has been the release of an investor update.

According to the release, the company has signed its first enterprise customer for its Locate2u platform, Amart Furniture.

Zoom2u will provide Amart with access to the Locate2u software as a service (SaaS) technology platform for an initial 24-month term. After which, Amart will have the option to extend the term for a further two, 12-month periods.

Either party may terminate this agreement, with or without cause, upon 90 days’ written notice.

The release notes that Locate2u will enable Amart’s drivers to provide efficient and transparent delivery of products directly to the retailer’s customers.

However, it is worth noting that the revenue derived from the Amart agreement is not expected to have a material impact on the financial performance of the company in FY 2022. Though, that clearly hasn’t stopped investors bidding the Zoom2u share price materially higher today.

Anything else?

Also giving the Zoom2u share price a lift was news that it has entered into an agreement with Bing Lee for access to the Zoom2u Platform.

Bing Lee will use the platform to enable the fast delivery of selected goods to consumers.

The release notes that the agreement is based on Zoom2u’s standard customer contract and does not have a termination date. Zoom2u will receive standard transaction fees for each delivery completed for Bing Lee. It also stressed that there are no minimum delivery quantities pursuant to this agreement, nor is it an exclusive arrangement.

Finally, management advised that FY 2022 has started strongly. And while it acknowledges that lockdowns are supporting its growth, it remains “confident that it will continue to drive growth, delivering sustained operational performance for shareholders in FY22 and beyond.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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