Upward pressure on interest rates has seen investors flee from growth stocks, which dominate the tech sector.

In fact, despite a rally this year, the S&P/ASX All Technology Index (ASX: XTX) is still down more than 30% since November 2021.

Among these, businesses with smaller market capitalisations have suffered even more.

But Datt Capital chief investment officer Emanuel Datt reckons "valuations are beginning to look attractive" for these types of shares. 

"Small caps present many compelling reasons for investing," he said.

"These include access to earlier-stage, higher-growth businesses, a broader range of sector opportunities to pick from and an ability to more easily back future trends."

Three cheapie small-caps to consider

For Datt, a recent phenomenon points to a possible revival in small-cap tech stocks.

That's the rise of generative artificial intelligence from the sudden entry of ChatGPT and GPT-4 into the zeitgeist.

"Artificial Intelligence or AI adoption is on the front burner for many small-cap tech focused companies," he said.

"We view this environment becoming more crowded and highly competitive."

Perhaps the most obvious ASX tech stock to benefit could be AI data provider Appen Ltd (ASX: APX).

"Appen… has experienced significant downward pressure on the share price at the same time as AI has catapulted into mainstream consciousness via the launch of OpenAI's ChatGPT," said Datt.

"ChatGPT has transformed AI from a vague and remote concept to a readily accessible real-world experience in a matter of months."

Intellihr Ltd (ASX: IHR), which employs AI for its human resources software, has also struggled with a falling share price.

Datt noted that it's "become the subject of merger and acquisition activity".

"The maker of AI based avatars that converse in real time with any audience is currently the subject [of] a takeover offer from Humanforce Holdings Pty Ltd, after experiencing a share price slide of around 75% last year."

Higher interest rates have hit companies like Bravura Solutions Ltd (ASX: BVS) pretty hard, according to Datt.

"Bravura Solutions lost more than 50% of its market value in calendar 2022," he said.

"Technology companies are also coping with higher cost inputs because of an inflationary environment impacting further development. They have been always particularly vulnerable to rising interest rates, which drive up the present-day cost of investing in future earnings."

Two ASX tech stocks that are just torching cash

On the other side of the coin, there are technology stocks that are also heavily discounted but Datt wouldn't go anywhere near.

"High cash-burn business models that have questionable sustainability, in our view, include call recording company Dubber Corp Ltd (ASX: DUB) and cloud based communications provider Whispir Ltd (ASX: WSP)."

The Dubber share price has lost a shocking 86% over the past year, while Whispir has fallen 82%.

The post 3 'compelling' ASX tech shares cheap enough to buy now appeared first on The Motley Fool Australia.

The IntelliHR Ltd (ASX: IHR) share price soared soared 75% in earlier trade to 11 cents before retreating slightly. The company's share price is now soaring 67% to 10.5 cents.

Let's take a look at why this ASX tech share is storming higher today.

Potential takeover

Investors are buying up Intellihr shares today amid news of a potential takeover.

Intellihr has entered a Scheme Implementation Deed for Humanforce Holding Pty Ltd to takeover all of the company's shares. Humanforce is a subsidiary of funds advised by private equity company Accel-KKR.

Under the potential takeover, Intellihr shareholders would receive 11 cents per share. This represents a 75% premium on Monday's closing price of 6.3 cents.

However, with Intellihr shares now up 67% to 10.5 cents, this now represents just a 5% upside on the current share price at the time of writing.

Intellihr's board believes the offer "provides shareholders with certainty of value today" for the potential of the business. Commenting on the news, Intellihr chair and CEO Matt Donovan said:

The board believes the proposed all-cash offer represents attractive value
and provides an immediate opportunity for shareholders to realise certain value at a significant premium to the market.

Humanforce is a provider of workforce management and payroll solutions for deskless workforces. Customers include Flight Centre, Secure Parking, Accore and Delaware North. Commenting on today's news, Humanforce CEO Clayton Pyne added:

There is a compelling synergy between IHR and Humanforce, who share the vision of enabling businesses to drive automated compliance, cost optimisation and engagement by revolutionising the employee experience, through intelligent, employee-centred technology.

IntelliHr share price snapshot

The IntelliHr share price has descended nearly 38% in the last year.

This ASX tech share has a market capitalisation of about $36 million based on the current share price.

The post Guess which ASX tech share just rocketed 75% on takeover news appeared first on The Motley Fool Australia.

The software-as-a-service provider received more than $1 million worth of contracted annual reoccurring revenue and implementation over the first quarter of financial year 2022.

It also secured its first customer in the hotel and tourism market.

At the time of writing, the IntelliHR share price is 23.2 cents, 7.91% higher than its previous close.

Let's take a closer look at today's news from the human resources-focused technology company.

IntelliHR's successful first quarter

The IntelliHR share price is taking off today after the company announced record quarterly sales and revenue growth.

The quarter just been saw IntelliHR's annual reoccurring revenue reach $776,000. It also generated $225,000 from professional services.

Further, 43% of the company's new revenue was generated from overseas customers. The company said this highlights its global potential and validates its sales channel.

IntelliHR won 33 new contracts over the first quarter.  As of 30 September, it had 43,784 contracted subscribers. Additionally, IntelliHR boasted 100% customer retention for the quarter.

Likely helping the IntelliHR share price today, is news the company has welcomed its first customer from the enterprise hotel and tourism market.

Jamaican-based Couples Resort signed up to use the company's software to help support more than 1600 of its team members. Couples Resort's contract is expected to bring in between $180,000 and $220,000 for IntelliHR.

Of the Couple Resort's contract, IntelliHR's Americas president and chief customer officer Glenn Donaldson said:

With the world gradually returning to normality, the tourism industry and hotel industry have become a key strategic focus with IntelliHR's HR process configurability well positioned to support the personalised and culturally focused needs of this sector.

IntelliHR share price snapshot

Despite today's uptick, the IntelliHR share price has been performing poorly lately.

It has fallen 58% since the start of 2021. However, it has gained 3% since this time last year.

The post Why has the IntelliHR (ASX: IHR) share price jumped 8% on Thursday? appeared first on The Motley Fool Australia.

This follows the completion of the data analytics company's recent $11.5 million placement.

What's impacting the IntelliHR share price today?

In a release to the market this morning, IntelliHR informed investors of its successful capital raising. The placement was conducted at 23 cents per share — receiving "very strong" interest.

According to the announcement, the capital raising gained the backing of a number of leading Australian and offshore institutional and sophisticated investors.

The offer price represented a steep 20.7% discount to the last close price of 29 cents. This significant discount, coupled with the share count being diluted by roughly 18%, is likely contributing to the IntelliHR share price weakness today.

Approximately 50 million new IntelliHR shares at the issue price of 23 cents were allocated, resulting in $11.5 million being raised in total before costs.

These funds will be put towards various drivers for the continued growth of the IntelliHR business. These include expanding its global integrations and referral partnership channels; accelerating growth in domestic and global customer business development; and building out enterprise customer platform capabilities.

Additionally, approximately 6.5 million existing shares were divested by managing director Robert Bromage. Despite this selldown, Bromage remains the second-largest shareholder in the company, holding approximately 21 million IntelliHR shares. The sale is said to be for funding the purchase of a residential property.

Bromage commented on the placement that is likely affecting the intelliHR share price:

Thanks to record global organic growth during FY21 and recent channel partnership successes, this capital raising presented us with the opportunity to introduce a number of leading Australian and international institutional investors onto the register.

With intelliHR continuing to invest in accelerating global growth, the introduction of these investors onto the register will strongly support our growth aspirations given their SaaS [software as a service] sector investing track record and significant funds under management.

What's next?

The issuing of approximately 46.38 million shares will be conducted on or around 27 September 2021. These are not subject to shareholder approval.

However, the 3.62 million new shares placed with IntelliHR's largest shareholder, Colinton Capital Partners, will be subject to shareholder approval. In fact, shareholders will vote on it at the annual general meeting in November.

The intelliHR share price is down by around 50% since the start of the year but is up by about 28% in the past 12 months.

Based on the current IntelliHR share price, the company's market capitalisation stands at around $89.4 million when accounting for dilution.

The post Here's why the IntelliHR (ASX:IHR) share price is plunging 10% today appeared first on The Motley Fool Australia.

Three small caps that investors may want to get better acquainted with are listed below. Here's why they should be on your watchlist:

Booktopia Group Ltd (ASX: BKG)

The first small cap ASX share to watch is Booktopia. It is the largest Australian-owned online book retailer by market share. Since FY 2012, Booktopia Group has sold more than 32.6 million items to its rapidly growing customer base. This includes 6.5 million items in the 12 months to 30 June 2020. Pleasingly, this number looks set to be surpassed in FY 2021 thanks to the shift online and its new distribution centre. The latter is allowing it to capitalise on the online shopping shift by shipping more books than ever.

Damstra Holdings Ltd (ASX: DTC)

Another small cap ASX share to watch is Damstra. This integrated workplace management solutions provider's cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. Demand has been strong for this technology during the pandemic, leading to stellar recurring revenue growth. For example, Damstra recently reported a 65% year on year increase in its annual recurring revenue to $35 million. This compares to its 2022 estimated total addressable market (TAM) of US$20 billion.

IntelliHR Ltd (ASX: IHR)

A final small cap ASX share to watch is IntelliHR. It is a cloud-based human resources and people management platform provider. IntelliHR has been growing its subscribers and ARR strongly over the last couple of years. This is being driven by the shift to the cloud and its international expansion. Looking ahead, management sees continued revenue growth in new and existing markets. It also intends to make further investments in both R&D and sales and marketing resources. This is to capitalise on a large and fast-growing global market.

The post 3 small cap ASX shares investors should watch very closely appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are pushing higher:

CSL Limited (ASX: CSL)

The CSL share price is up 1.5% to $282.00. This morning analysts at Ord Minnett retained their hold rating on the biotherapeutics company's shares but lifted their price target by 5.2% to $280.00. The broker is confident the company's plasma collections will recover by the end of the year, albeit with higher collection prices.

Humm Group Ltd (ASX: HUM)

The Humm share price is up over 6% to $1.04 after releasing a business update. According to the release, the financial services company had a strong finish to the financial year. As a result, it expects to report a FY 2021 cash net profit after tax of $68.4 million. This will be an increase of 121.1% on the prior corresponding period.

IntelliHR Ltd (ASX: IHR)

The IntelliHR share price has jumped 11% to 24.5 following the release of its fourth quarter update. According to the release, the HR technology company finished the financial year in a very positive fashion, reporting $1 million in new contracted business. This was a 236% increase on the same period in FY 2020. This ultimately underpinned the doubling of its annualised recurring revenue in FY 2021.

Vulcan Energy Resources Ltd (ASX: VUL)

The Vulcan share price is up 2% to $9.50. Investors have been buying the lithium explorer's shares on Monday after it announced its first offtake agreement. According to the release, Vulcan has signed an initial five-year agreement starting in 2025 with LG Energy Solution for battery grade lithium hydroxide. LG Energy Solution is the largest producer of lithium-ion batteries for electric vehicles in the world. The agreement is for 5,000 metric tonnes in the first year and then 10,000 tonnes each year thereafter.

The post Why CSL, Humm, IntelliHR, & Vulcan shares are pushing higher appeared first on The Motley Fool Australia.

Three that investors might want to get better acquainted with are listed below. Here's why they should be on your watchlist:

Damstra Holdings Ltd (ASX: DTC)

Damstra is a growing integrated workplace management solutions provider. The company's cloud-based workplace management platform is used by businesses across the globe to track, manage, and protect their workers and assets.

During the first half of FY 2021, the company delivered a 29.6% increase in revenue to $13.3 million. Even if you annualise this, it is still the smallest fraction of a total addressable market estimated to be worth US$20 billion by 2022.

IntelliHR Ltd (ASX: IHR)

Another small cap ASX share to watch is IntelliHR. It is a cloud-based human resources (HR) and people management platform provider. Its platform has been designed to support HR professionals and leadership teams within an organisation, using technology that automates manual HR processes and captures critical people data.

Management notes that this gives users a real-time understanding of an organisation's human resources and provides tools to create a performance-based culture aligned with the employer's business strategy. It also contributes to strategic decision-making with data driven insights. 

IntelliHR recently released a trading update which revealed annual recurring revenue (ARR) had reached $3.55 million. This was double what it reported a year earlier.

SILK Laser Australia Limited (ASX: SLA)

A final small cap ASX share to watch is SILK Laser. It is a laser, skin care, and cosmetic injections company that has been performing very strongly in FY 2021. In February, SILK Laser released its half year results and revealed a 62% increase in network sales to $44.9 million and a 305% increase in net profit to $4.7 million.

Looking ahead, management sees plenty of opportunities to expand its network to drive growth. At present, SILK has a total of 56 clinics in operation. This is well short of its goal of increasing its network by 6 to 10 new clinics per annum up to a total of approximately 150 clinics.

The post 3 growing small cap ASX shares to watch appeared first on The Motley Fool Australia.

Three that investors might want to keep a close eye on are listed below. Here's what you need to know about them:

IntelliHR Ltd (ASX: IHR)

The first small cap ASX share to watch is IntelliHR. It is a cloud-based human resources and people management platform provider. Last month IntelliHR released a trading update which revealed that its expansion into the United Kingdom was going exceptionally well. Thanks partly to this, at the end of April the company's annual recurring revenue (ARR) had reached $3.55 million. This was double what it reported a year earlier. Positively, the company looks well-placed to continue its solid growth in the coming years thanks to the shift to the cloud and the quality of its software.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to watch is PlaySide Studios. It is a growing independent video game developer with an expanding portfolio of games. These include games based on its own original intellectual property and those through licensing deals 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. Pleasingly, this is just a very small slice of its global market opportunity. Management estimates that it has a US$159 billion global addressable market, which gives it a very long runway for growth.

SILK Laser Australia Limited (ASX: SLA)

A final small cap ASX share to watch is SILK Laser. It is a laser, skin care, and cosmetic injections company that has been performing very strongly in FY 2021. In February, SILK Laser released its half year results and revealed a 62% increase in network sales to $44.9 million. Things were even better on the bottom line, with net profit growing 305% to $4.7 million. Positively, this strong form is expected to continue in the second half. Looking further ahead, management sees plenty of opportunities to expand its network to drive growth. At present, SILK has a total of 56 clinics in operation, but management intends to grow its network by 6 to 10 new clinics per annum up to a total of approximately 150 clinics.

The post 3 under the radar small cap ASX shares to watch appeared first on The Motley Fool Australia.

At the time of writing, the data analytics company's shares are trading for 33 cents, up 16%.

What's driving the IntelliHR share price?

Investors are fighting to get a hold of IntelliHR shares after the company reported strong growth across key metrics.

For the period ending 28 April (first 4 months of 2021), IntelliHR delivered an improved performance underpinned by its United Kingdom expansion.

Annual recurring revenue (ARR) acquisition reached a record, up 304% year-on-year (YoY) from H1 FY20. Contracted ARR also rose to $3.55 million. A significant jump on the $1.79 million from the prior corresponding period (pcp).

Contracted subscribers also surged to 35,080, reflecting an increase of 270% of YoY numbers (12,829 subscribers).

Average lead generation in Q3 FY21 to date lifted 100% with global expansion opening in new markets.

Additionally, IntelliHR highlighted its efforts to expand into the United Kingdom and European markets. In particular, the launch of its software platform. This has already rewarded the company with a significant new United Kingdom enterprise customer win.

The company noted that the conversion of TRU West Alliance enables it to partner with the leading global engineering group, ARUP. The contract will run for a 36-month period and support up to 1,000 designers during the project's initial phase. Revenue generation for IntelliHR is expected to come between $280,000 and $511,000 for service in the next 12 months.

In addition, IntelliHR also revealed the other 2 enterprise conversions in H2 FY21. They were an innovative container processing business, Young Guns, and specialty baby goods retailer, Baby Bunting Group Ltd (ASX: BBN).

Commentary from the managing director

IntelliHR managing director, Rob Bromage touched on the company's strategic direction, saying:

Following our North American market successes, we chose to accelerate our expansion into the UK market. This decision has already been rewarded with ARUP and the TRU West alliance choosing to partner with intelliHR through competitive tender.

Engineering Group ARUP represents a prestigious cornerstone UK/European customer that will be supported by a new instance of intelliHR's platform in AWS's EU region. With Enterprise Client successes in APAC, North America, and now the UK/Europe, intelliHR is clearly being recognised as an Enterprise HR and People Management platform capable of supporting global business needs.

The IntelliHR share price has accelerated to over 500% in the past 12 months. However, year-to-date performance is down 34%.

The post Why the IntelliHR (ASX:IHR) share price is soaring 16% today appeared first on The Motley Fool Australia.

Here's what you need to know about these exciting small cap shares:

Alcidion Group Ltd (ASX: ALC)

The first small cap share to watch is this informatics solutions company. Alcidion provides software which has been designed to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. It looks well-positioned for growth because of the shift to a paperless environment in the healthcare sector. Positively, Alcidion has announced a number of major contract wins this financial year.

IntelliHR Ltd (ASX: IHR)

IntelliHR is a cloud-based human resources technology business that is developing and marketing a next-generation cloud-based people management and data analytics platform. The company notes that its disruptive and advanced technology leverages artificial intelligence, is highly scalable, and industry agnostic. Demand has been growing for its platform, leading to strong annualised recurring revenue growth in FY 2021.

Nitro Software Ltd (ASX: NTO)

Nitro Software is another small cap ASX share to watch. It is a software company that is aiming to drive digital transformation in organisations around the world. Its key 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. Nitro counts a number of the largest companies in the world as customers.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap ASX share to watch is Volpara Health Technologies. It is a provider of software that uses artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. Volpara has been growing at a rapid rate in recent years thanks to market share gains and its expanding average revenue per user (ARPU) metric. Thanks to acquisitions and its growing product portfolio, the latter metric is expected to rise significantly in the coming years. This could be supportive of further stellar growth over the 2020s.

The post 4 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

This follows the release of the data analytics company's financial results for the half-year ending 31 December (H1 FY21).

What did intelliHR report?

In this morning's ASX release, intelliHR reported contracted annual recurring revenue of $2.87 million. That's up 82%, or $919,000, compared to the first half of FY20.

The company credited its international expansion for bringing in a record number of new contracted subscribers for the half-year. The 29,170 subscribers as at 31 December represented a 147% increase year-on-year.

There was also a 58% year-on-year increase in annual recurring revenue (ARR) per account. Its total new contracted customers for the half grew by 60% compared to the prior corresponding period (pcp), with 43 new customers added.

intelliHR's total expenses also ramped up by $1,47 million, 63.7% higher than H1 FY20. The company pointed to an increase of $1.02 million in employee benefits costs due to planned team growth and a $729,000 non-cash increase in expenses from the issue of new employee share benefits for the rise.

The company reported a loss after income tax expense of $3.03 million, compared to the loss of $2.32 million in the pcp. Diluted earnings per share (EPS) of –1.23 cents was up from –1.54 cents in the corresponding period.

A 20% reduction in the company's cash burn rate left it with the strongest cash position in its history, with $6.86 million cash as at the end of the half-year.

Management commentary

Commenting on the results, intelliHR managing director Robert Bromage said:

Over 40% of our subscribers are now located outside Australia and we have entered a new phase in our revenue generation with three international enterprise customers added in 1H21. This increased average customer headcount by 45%.

intelliHR's recent continued Enterprise success has established its credibility as having a strongly differentiated people management solution capable of competing with leading industry incumbents.

Looking ahead, Bromage added:

With multi-language support to be added to the platform in the coming weeks, our plan is to target Europe with expectations of market entry later this year, significantly increasing our addressable market.

About the intelliHR share price

It's been a great 12 months for intelliHR shareholders, with shares up 550% since this time last year. By comparison, the All Ordinaries Index (ASX: XAO) is down 2% in that same time.

Year-to-date, the intelliHR share price is down 16%.

The post Here's why the IntelliHR (ASX:IHR) share price is rocketing 15% today appeared first on The Motley Fool Australia.

Three that investors might want to get better acquainted with are listed below. Here's what you need to know about them:

IntelliHR Ltd (ASX: IHR)

The first small cap ASX share to look at is IntelliHR. It is a cloud-based human resources and people management platform provider. Last month the company released its second quarter update and revealed that its international expansion strategy was going very positively. This expansion underpinned a 23% increase in second quarter Annualised Recurring Revenue (ARR) and and a 147% increase contracted subscriber headcount. Approximately 77% of its new subscribers came from the massive North American market.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to look at is PlaySide Studios, It is one of Australia's largest independent video game developers, with a growing portfolio of games. This includes games based on its own original intellectual property and games developed with Hollywood studios such as Disney. Late last month, PlaySide released its second quarter update and revealed quarterly revenue of $3.13 million. This was an increase of a 66% over the first quarter. Given that management estimates that the global mobile games market is worth $77.2 billion per annum, it clearly has a long runway for growth in the future.

Whispir Ltd (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. Its software platform allows businesses and governments to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. Earlier this week, Whispir released its half year results and reported a 29.2% increase in its ARR to $47.4 million. This was driven by increased activity from its existing customers and the addition of 77 net new customer to a total of 707 customers. This is still only scratching at the surface of its global market opportunity.

The post 3 exciting small cap ASX shares to put on your watchlist appeared first on The Motley Fool Australia.

After all, you only have to look at how companies like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) have gone from being small caps flying under the radar to multi-billion dollar industry giants in just a few short years.

But which ASX small cap shares should you look at? Here are two to become better acquainted with:

IntelliHR Ltd (ASX: IHR)

The first small cap to look at is IntelliHR. It is a cloud-based human resources and people management platform provider that has been growing at a solid rate over the last 12 months.

For example, IntelliHR recently released its second quarter update and revealed a $0.5 million or 23% quarter on quarter increase in its Annual Recurring Revenue (ARR) to $2.9 million. Management advised that this strong growth was achieved thanks to the addition of a record 24 new paying customers. This increased its total contracted customers to 151, which was 26% higher than the first quarter.

According to a recent presentation, the company's global addressable market is in excess of $38 billion. This gives it a significant runway for growth over the next decade and beyond.

Whispir (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. Its popular platform automates communications between organisations and people. This enables users to improve their communications through automated workflows to ensure stakeholders receive accurate, timely, useful, and actionable insights.

An example of this is the government using Whispir's platform during the height of the COVID-19 pandemic. This included interactive two-way messages and real-time updates to sufferers and those who had been in the close contact with someone with COVID-19, as well as daily communications with those in self-isolation.

Whispir's has been a very positive performer in FY 2021. The company recently released its second quarter update and revealed ARR growth of 29.2% to $47.4 million. Management advised that this was driven by ongoing demand for communications software to automate processes and improve stakeholder engagement.

The good news is that this represents less than 1% of an overall market opportunity which is estimated to be worth US$8 billion per year by 2024.

The post Could these exciting small cap ASX shares be the next big thing? appeared first on The Motley Fool Australia.

Three small cap shares that could be worth adding to your watchlist are listed below. Here's what you need to know about them:

CleanSpace Holdings Limited (ASX: CSX)

CleanSpace is a designer, manufacturer, and seller of workplace respiratory protection equipment (RPE) for healthcare and industrial end markets. It recently listed on the Australian share market, raising $20 million to support its growth plans. These plans include building on the adoption of CleanSpace products in the healthcare and industrial markets, product development, expanding awareness, and entering new international markets.

IntelliHR Ltd (ASX: IHR)

Another small cap to watch is IntelliHR. It is a next-generation cloud-based people management and data analytics platform provider. Demand for its platform has been growing strongly this year, leading to the company reporting a 148% increase in subscriber numbers to over 30,000 during the first five months of FY 2021. This underpinned an 81.3% increase in its contracted annual recurring revenue (ARR) to $2.8 million. Pleasingly, management appears confident there will be more of the same in future thanks to the quality of its software, international expansion, and favourable industry trends.

Nitro Software Ltd (ASX: NTO)

A final small cap to watch is Nitro Software. It is a growing software company driving digital transformation in businesses around the world across multiple industries. Nitro's key solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers via a software-as-a-service and desktop-based software solution. Demand for its offering has been stronger than expected in FY 2020, leading to management recently upgrading its guidance. Nitro expects its subscription ARR to come in at $26 million to $27 million in FY 2020. This compares to the $24.4 million ARR it guided to in its IPO prospectus.

The post 3 exciting small cap ASX shares to watch very closely appeared first on The Motley Fool Australia.

Two small cap shares that could be deserving of a spot on your watchlist are listed below. Here's what you need to know about them:

IntelliHR Ltd (ASX: IHR)

The first small cap to look at is IntelliHR. It is a cloud-based human resources and people management platform provider.

IntelliHR has been growing at a very strong rate this year. During the first five months of FY 2021, the company delivered a sizeable 148% increase in subscriber numbers to over 30,000 contracted subscribers.

This strong customer growth has translated into strong recurring revenue growth so far in FY 2021. As of its last update, IntelliHR's contracted annual recurring revenue (ARR) was up 81.3% to $2.8 million.

Management appears confident there will be more of the same in future thanks to its quality software, international expansion, and favourable industry trends. It notes that the company is well-placed in a high growth global market being disrupted by the Working-from-Home trend.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap to look at is Volpara. It is the New Zealand-based healthcare technology company behind the VolparaEnterprise software solution.

This product is a cost-effective, mission-critical tool that helps clinics deliver the highest-quality breast imaging services. In addition to this, the company has a growing number of add-on solutions that work with VolparaEnterprise.

These add-ons are expected to drive material average revenue per user (ARPU) growth in the future. At the end of the first half, the company's ARPU stood at US$1.16. However, management is aiming to grow this to US$10 in the future through its full product suite.

One broker that is a fan of Volpara is Morgans. It currently has an add rating and $1.71 price target on its shares.

The post 2 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

Five that investors might want to get better acquainted with are listed below. Here's what you need to know about them:

Alcidion Group Ltd (ASX: ALC)

Alcidion is an informatics solutions company. It provides software that has been designed to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. Demand for its software has been increasing and has led to a number of major contracts with healthcare institutions in the UK.

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a provider of enterprise mobility software. The company's software allows sales and service organisations to increase sales win rates, reduce expenditures, and improve customer satisfaction. This is achieved through improved mobile worker productivity. It has a large number of blue chips using its platform, including banking giant Australia and New Zealand Banking GrpLtd (ASX: ANZ) and Nike.

IntelliHR Ltd (ASX: IHR)

IntelliHR is a cloud-based human resources and people management platform provider. It has been growing very strongly this year. For example, during the first five months of FY 2021, IntelliHR revealed an impressive 148% increase in subscriber numbers. As a result, it now has almost 30,000 contracted subscribers on its books. This has underpinned similarly strong revenue growth. As of its last update, the company's contracted annual recurring revenue (ARR) was up 81.3% to $2.8 million.

Pointerra Ltd (ASX: 3DP)

Another small cap to look at is Pointerra. It is a growing technology company with a focus on the commercialisation of 3D geospatial data. Pointerra's software allows users to manage, visualise, and share large digital 3D datasets. This software is able to extract vital information from the data that would otherwise take many hours to do. Management estimates that its market opportunity is currently worth a massive $500 billion annually.

Whispir (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. Its software platform allows businesses and governments to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. Management believes its platform revolutionises customer engagement, business resilience, and operational communications process.

The post 5 exciting small cap ASX shares to watch in 2021 appeared first on The Motley Fool Australia.

Then take a look at the ASX small cap shares listed below, which are both growing at a rapid rate in 2020. Here's what you need to know about them:

IntelliHR Ltd (ASX: IHR)

IntelliHR is a cloud-based human resources and people management platform provider which has been growing at an explosive rate this year. During the first five months of FY 2021, the company reported an impressive 148% increase in subscriber numbers. As a result, it now has almost 30,000 contracted subscribers on its books.

This strong customer growth has underpinned similarly strong revenue growth. As of its last update, IntelliHR's contracted annual recurring revenue (ARR) was up 81.3% to $2.8 million.

But management isn't resting on its laurels and remains highly focused on delivering further growth in the years to come. This will be supported by its high quality software, international expansion, and favourable industry trends.

In respect to the latter, the company notes that it is well-positioned in a high growth global market that is being disrupted by the trend to Working-from-Home brought on by the pandemic.

Pointerra Ltd (ASX: 3DP)

Pointerra is a growing technology company with a focus on the commercialisation of 3D geospatial data. It provides a software solution that allows users to manage, visualise, and share large digital 3D datasets. This software is able to extract vital information from the data that would otherwise take many hours to do.

Demand for the company's technology has been growing strongly. This led to its Annual Contract Value (ACV) increasing 18% to US$5.82 million between October and November. This, however, is still only scratching at the surface of its market opportunity. Management estimates that it is currently worth a staggering $500 billion annually.

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In fact, at one stage the human resources technology company's shares were up 26% to a 52-week high of 36.5 cents.

At the time of writing, the IntelliHR share price is up almost 21% to 35 cents.

Why is the IntelliHR share price at a 52-week high?

Investors have been buying the company's shares this week after the release of an investor day update.

At the event, the company reminded investors how it is performing in FY 2021 and its plans for the future.

In respect to the former, during the first five months of FY 2021, the company's subscribers have increased 148% year on year and more than doubled since the end of the last financial year. It is now rapidly approaching 30,000 contracted subscribers, with 28,779 contracted as of 26 November.

This strong subscriber growth has underpinned an 81.3% jump in its contracted annual recurring revenue (ARR) to $2.8 million.

IntelliHR's Managing Director, Rob Bromage, commented: "IntelliHR has always been built to be a Global HR Platform, and our ambition from the outset was to build a global business. It is tremendous validation of our team's commitment to this vision that approximately 40% of our subscribers are now located outside Australia, and that 4 enterprise customers from across the globe have been added in the last 6 months alone."

"This recent enterprise success has established our credibility as having a strongly differentiated people management solution which complements the needs of these clients, and we are pleased to see a strong enterprise pipeline emerging," he added.

What about the future?

The company is currently working on phase three of its six phase growth strategy.

Phase 3 sees the company aiming to triple its sales capabilities by servicing three jurisdictions – Australia, New Zealand, and North America.

Once this is complete, it will move onto phase four. This will see the company heading to the UK and aiming to drive further growth in the United States by tripling its online sales and partnerships.

The post Why the IntelliHR (ASX:IHR) share price rocketed 26% higher to a 52-week high appeared first on The Motley Fool Australia.

What was in the the intelliHR business update?

The intelliHR business update came in the form of a presentation and gave investors an update about how the company has been performing. 

In FY 2020, intelliHR had 18,433 subscribers. This was an increase of 92% on subscriber numbers in 2019. Cash receipts from customers increased 126% on the prior financial year to $1,501,000.

Annual recurring revenue was up 62% in FY 2020 to $1,955,000. Revenue from professional services was $322,000 which represented a 153% increase on the prior year.

The number of customers on the intelliHR platform increased to 153 in FY 2020 which is a year-on-year increase of 162%.

What are the details of the intelliHR capital raising?

The company announced that it intends to raise $5.5 million through a strategic placement and rights issue. The strategic placement will include issuing up to 33,333,333 ordinary shares to famous technology entrepreneur, Bevan Slattery. Mr Slattery, along with the company's largest shareholder, Colinton Capital Partners, will underwrite the entitlement offer.

The issue price of intelliHR shares purchased under the rights issue is 7.5 cents and existing shareholders will be able to purchase one share for every five shares held on the ex date of 10 August, 2020. The rights issue is expected to raise $3 million.

Senior partner at Colinton Partners, Simon Moore, commented on the capital raising, stating;

"We are very pleased to continue our support of intelliHR and welcome the involvement of one of Australia's leading technology entrepreneurs, Bevan Slattery, as a major shareholder in the company. The intelliHR business has demonstrated robust growth through the period of COVID-19, with strong growth in subscriber numbers, positive net revenue retention and the rapid launch of the COVID-19 Essentials platform."

According to Mr Moore, the capital raising will allow the company to accelerate its global growth and further invest in its capabilities.

About the intelliHR share price

intelliHR is a software-as-a-service (SaaS) provider that develops and sells cloud-based HR management software. The company has active users in Australia, New Zealand, Europe, North America, Asia and Africa.

In the quarter to 30 June 2020, the company used $637,000 cash in operations and had $2,791,000 cash at 30 June. This compared to cash of $3,428,000 at the end of the previous quarter.

The intelliHR share price is up 567% since its 52 week low of 3 cents and has returned 100% since the beginning of the year. The intelliHR share price is up 150% since this time last year. 

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