Software-as-a-service provider for the education and payroll sector ReadyTech has begun trading on the Australian Securities Exchange (ASX) with a revised market capitalisation of $120.8 million and an initial public offering of $1.51 per share, raising about $50 million.
These figures were revised in March, whereby the company was seeking to raise between $90 million to $98.5 million with a share price ranging between $1.90 to $2.54.
ReadyTech was founded more than 20 years ago, originally known as JobReady and launched its first software product in 1999. It now has more than 150 staff, with a majority of its workforce focused on product development.
Its SaaS offerings aim to help companies comply with regulatory reporting and legislative compliance obligations as well as manage large numbers of people and drive particular outcomes relating to student completion rates, and employee engagement for educators and employers.
In the education segment, ReadyTech’s core products are its student management systems, tracking student enrolments through to course completion. It has also developed a platform for the Government’s vocational education and training programs, along with a behavioural, science-based assessment tools to help improve student completion rates.
In the employment space, ReadyTech’s core products are its payroll software, outsourced payroll services and human resource administration software.
The company has more than 3,600 customers with an average tenure of seven years. Some of these customers include TAFE institutes, University of Queensland, iSelect, Mecca Brands and Brand Collective. As at FY18, the company said it has a 95 per cent revenue retention rate from existing customers.
In a letter to prospective investors, ReadyTech chairman Tony Faure said its growth strategy centred on winning new and higher value customers, while also driving greater spend per customer with additional products and value-add services. In this respect, the company is aiming for 14.4 per cent revenue growth to $35.1 million in 2019 calendar year.
Faure also pointed out some of the key risks investors faced in ReadyTech included failure to retain existing clients and attract new business; increased level of competition as well as disruption or failure of technology systems and software, including security breaches.
Led by CEO Marc Washbourne, ReadyTech has also credited its reseller and channel partner network for helping the SaaS provider gain traction among higher value customers through bundling with third-party ERP solutions. The SaaS vendor said it has also identified a current customer pipeline of opportunities, worth about $15 million in gross annual revenue.
“ReadyTech will consider forming additional partnerships, strategic alliances and extend its network of channel partners and resellers when appropriate to allow ReadyTech to continue to expand its customer value proposition, and deepen penetration in new and existing markets,” the company said.
During FY18, resellers accounted for less than 15 per cent of new business wins for the SaaS vendor in the employment segment.
Recently, ReadyTech was selected to assist the Federal Government with a $3 million job seeker trial in Sydney, led by PwC, to help older job-seekers find and retain employment through developing a career management tool.
At the time, Minister for Families and Social services Paul Fletcher said the tool would anchor interaction with job-seekers for the trial to enable connected, tailored support and training to help improve job-seeker confidence.