Here's why these four ASX small cap shares could be ones to watch in 2021 and beyond:

Audinate Group Limited (ASX: AD8)

The first small cap share to look at is digital audio-visual networking technologies provider, Audinate. It is best known for its industry-leading Dante audio over IP networking solution. This solution is used widely across a number of industries and is currently dominating the competition. In fact, at the last count, the number of Dante enabled products manufactured by its customers was eight times greater than its nearest rival. This appears to have positioned it perfectly for growth once the pandemic passes.

Felix Group Holdings Limited (ASX: FLX)

Another small cap ASX share to watch is Felix. It is a cloud-based enterprise software-as-a-service marketplace platform provider for the commercial construction and related industries. Felix's platform connects contractors and their third-party vendors, automating and streamlining a range of critical procurement-related business processes in the sector. During the first half of FY 2021, Felix delivered Enterprise SaaS Contracted annualised recurring revenue (ARR) growth of 48% to $1.8 million. This compares favourably to its global total addressable market, which is estimated to be worth $7.2 billion.

PlaySide Studios Limited (ASX: PLY)

A third small cap ASX share to look at is PlaySide Studios. It is one of the largest independent video game developers in Australia. The company has a growing portfolio of developed games. This includes games based on its own original intellectual property and games developed with Hollywood studios such as Disney. During the first half of FY 2021, PlaySide reported record first half sales revenue of $5 million. This was up 63% on the prior corresponding period. Positively, this is just a tiny fraction of its global market opportunity.

Universal Store Holdings Limited (ASX: UNI)

A final small cap to watch is Universal Store. It is a fashion retailer which aims to deliver a frequently changing and carefully curated selection of on-trend products to a target 16-35 year old fashion focused customer. It has been a particularly positive performer during the pandemic and reported impressive growth during the first half of FY 2021. For the six months ended 31 December, Universal Store delivered a 23.3% increase in sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million.

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Here's why these small cap ASX shares could be ones to watch:

Felix Group Holdings Limited (ASX: FLX)

Felix is a cloud-based enterprise software-as-a-service marketplace platform provider for the commercial construction and related industries. It connects contractors and their third-party vendors, automating, and streamlining a range of critical procurement-related business processes. Since launching in 2013, its online Vendor Marketplace has grown to become a leading marketplace for the Australian commercial construction sector. In FY 2020 the company reported sales revenue of $3.7 million. This compares to its global total addressable market estimated to be worth $7.2 billion.

PlaySide Studios Limited (ASX: PLY)

PlaySide Studios is one of the largest independent video game developers in Australia. At present, the company has a total of 52 titles developed, including games based on its own original intellectual property and games developed with Hollywood studios. The latter comprises titles relating to Jumanji, The Walking Dead, and Disney Pixar's Cars. From these titles, PlaySide delivered a 55% increase in revenue to $7 million in FY 2020. This is just a fraction of its global market opportunity, which the company currently estimates to be worth $77.2 billion per annum.

Serko Ltd (ASX: SKO)

Serko is an online travel booking and expense management provider. Its Zeno Travel product provides AI-powered end-to-end travel itineraries, cost control and travel policy compliance to corporate customers. Whereas its other platform, Zeno Expense, allows users to automate and streamline the expense administration function, identify out-of-policy expense claims, and prevent fraud. Times have been hard because of the pandemic, but demand is starting to pick up. This should be supported by its recent deal with travel giant Booking.com.

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At one stage the construction-focused cloud-based enterprise software-as-a-service marketplace platform provider's shares were up as much as 24% to 43.5 cents.

This compares to a decline of almost 3% for the Felix share price after completing its initial public offering (IPO) yesterday.

What is Felix?

Felix provides a cloud-based enterprise software-as-a-service marketplace platform for the commercial construction and related industries.

It connects contractors and their third-party vendors, automating and streamlining a range of critical procurement-related business processes.

According to its prospectus, the company launched its online Vendor Marketplace in 2013. Since then it has grown to become a leading marketplace for the Australian commercial construction sector, used by contractors to source vendors and vendors to source new business leads.

Felix's enterprise customers include tier one Australian contractors and multinational commercial construction companies. Management also notes that the Felix platform is gaining traction in other sectors, with cornerstone customers secured in the government, utilities, mining and resources, and facilities management sectors.

As of the end of September, Felix's enterprise customer base had grown to 39,398 vendors. Over 800 of these vendors are located in 42 countries outside Australia, Management advised that this has occurred organically as a result of contractors using Felix on international projects.

Due to the stickiness of the product, the company enjoys high retention rates for its recurring revenues.

Felix's Chairman, Michael Bushby, explained: "Once adopted by Contractors, the Felix platform typically becomes a core part of and deeply embedded within a Contractor's operations, making it difficult to replace. This has led to an approximate 99% retention rate for contracted ARR."

In FY 2020 the company reported sales revenue of $3.7 million and a net loss of $7.2 million. This is still only a very small slice of a global total addressable market estimated to be worth $7.2 billion in 2020.

The Felix IPO.

On Tuesday the company's shares landed on the ASX boards after raising $12 million at 36 cents per new share.

The proceeds from the IPO are going to be used to accelerate sector and geographic expansion, platform development, and the release of new modules.

With 131.6 million shares on issue, Felix's market capitalisation now stands at approximately $57.2 million.

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