A Melbourne-based ASP only formed earlier this year has launched an IPO with a view to raising $6 million, which is planned to be used in taking its B2B industry exchange applications to market.
To be brokered by Peake Lands Kirwan Pty. Ltd., 1Xchange is looking to issue 20 million shares at $0.20 each with provision for another 10 million in the event of the float being oversubscribed.
Greg Larsen, general manager of 1Xchange said 1Xchange offers its own Microsoft-based platform with applications which deliver "a range of B2B industry exchanges" to market in various vertical and horizontal industries.
The company is betting its future and its investors' funds on the much-touted ASP business model and the future ubiquity of so-called industry-based "trading hubs".
"We see a lot of growth in industry exchanges," Larsen said, "1Xchange is very much a set of B2B applications focused on building industry exchanges."
According to Larsen, the directors behind 1Xchange hail from a strong local software development and IT solutions heritage. The goal with he second round of funding is to take the applications it has developed to market and to continue development of both existing and new applications, he said.
Larsen disagreed with general criticism of the ASP concept in Australia, a line of thinking that suggests there is neither sufficient high-bandwidth infrastructure nor the critical mass of users for the pay-as-you-use software application model to work.
"We are not trying to put SAP or Oracle down the line," Larsen said. "They are not hugely sophisticated programs. We have a series of products which are industry-generic which broadens the appeal of them.
David Brice, CEO of 1Xchange said in a press statement that he is confident the company is building a business model that will be successful in Australia.
"The Internet is a cheap, efficient and ubiquitous sales channel," Brice said. "The Internet provides suppliers with a new alternative for selling products and services that don't necessarily require the 'high touch' and related expenses of traditional channels.
"Many industries are extremely fragmented. Traditional sales and distribution channels are not endless, so there are potential buyers that suppliers never reach. B2B exchanges provide a venue in which vendors can peddle their wares to a brand new audience of potential customers, thereby generating new revenue streams," he added.