The ASX tech shares I'm going to write about have been hit quite hard amid all of the interest rate rises and inflation.
But, I think that lower share prices present us with the opportunity to buy compelling businesses at much cheaper prices.
In my view, technology businesses have the potential to deliver a lot of growth because of how cheaply another subscription can be replicated for a new user.
If what a business provides is software business, it can achieve very attractive profit margins over time. Taking that into account, I like the following ASX tech shares at the current prices
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Airtasker Ltd (ASX: ART)
Airtasker is a business that provides a platform for people to advertise that they need help with a particular service or situation, such as furniture assembly, painting, accounting, photography and many more. Individuals and businesses can offer to do that work.
The Airtasker share price has dropped 56% despite the company growing strongly over the past 12 months. In the company's FY23 half-year result, it announced that revenue rose 23%, excluding the Oneflare acquisition. Including the acquired business, revenue went up 57% to $21.8 million.
UK trailing twelve months (TTM) revenue rose 153% to £0.4 million, while US posted tasks grew 5.5 times year over year to 34,000. For the period in the report, international revenue increased 116.4% to $0.4 million.
Operating cash flow burn reduced by 29% year over year, with $23.3 million cash on the balance sheet.
I thought this result included everything that I was hoping for – revenue growth, slightly faster gross profit growth and ongoing progress internationally.
I think this business could grow strongly in the coming years, with its capital light model, double-digit revenue growth and a high gross profit margin.
Bailador Technology Investments Ltd (ASX: BTI)
This ASX tech share is a position in my portfolio. It's an investment company that invests in private technology businesses. Target businesses are predominately IT companies with international addressable markets and can generate recurring revenue.
The ASX tech share is currently trading at a 23% discount to the March 2023 net tangible assets (NTA).
It recently invested another $10 million in one of its biggest investments – InstantScripts, which is a "leading digital healthcare platform that enables Australians to conveniently access high quality doctor care and routine prescription medication in a safe, secure and clinically responsible manner."
InstantScripts has been growing its revenue at over 100% year over year, reflecting "tremendous consumer demand for telehealth and digital healthcare".
The ASX tech share also recently invested $9.8 million in volunteer management platform Rosterfy which helps manage over 1.5 million volunteers in over 20 countries. The business increased its recurring revenue by more than 100% year over year in 2022 as the not-for-profit sector "embraces digitisation".
I like this as a diversified way to invest in fast-growing tech businesses.
