Stockhead: Bailador seeks symbiosis to get Aussies growing alongside their tech investments
Bailador is giving investors the chance to invest in proven, profitable Aussie and NZ tech companies looking to expand and its business model is proving a winner.
Tech-focused growth capital fund Bailador Technology Investments (ASX:BTI) is providing investors with the chance to invest in growing, proven companies.
BTI co-founder and managing partner Paul Wilson said Bailador provides expansion capital to Australian and New Zealand tech companies with proven success, revenue and in the expansion stage.
“The whole idea is these companies are not new start-ups in a garage but have several million dollars of revenue, proven product, proven product market fit, a proven management team,” Wilson said.
“They are a lot less risky than a genuine tech start up, but neither are they already listed or perhaps already highly valued so what you get is a nice blend.”
Since listing on the ASX in 2014, BTI has been steadily growing its NTA with tech winners.
“We think that is the best risk reward, a company which is established but much cheaper than if it’s public and that’s the focus of the expansion stage,” Wilson said.
Companies looking for next level growth
Wilson said expansion stage tech companies are still often run by their founder or founding group.
He said in Australia and NZ there is a strong tech start-up ecosystem which has often heard of and seeks out Bailador for growth.
“It’s one of the reasons we focus on companies in Australia and New Zealand because we get to watch them for a while, reference their founding teams to see if they’re good people and do what they say they will do,” he said.
Bailador attends conferences and events which are a part of the tech ecosystem, getting to know the companies and founders who they in turn want to back.
“We are looking for founders who have cracked the code, can prove it in their data and are looking for a partner who can bring in capital and a bit of smarts to really help them accelerate,” he said.
“They’ve proven themselves with their product, are generating millions of dollars in revenue and have often heard of our success in growing other companies and taking them into global markets.”
Knack for picking winners
BTI recently sold its share of Instaclustr for $118 million and Standard Media Index (SMI) for $20 million.
“We invested in Instaclustr when they had proven market fit but revenue still under $10 million,” Wilson said.
“We were able to make 14 times on that investment because we got in on that relatively early stage.”
The sale saw Bailador introduce a generous new dividend policy which commits to paying semi-annual distributions.
It was an early investor in hotel commerce platform and tech unicorn Siteminder.com (ASX:SDR).
More recently, the company has invested in InstantScripts, which provides doctor-approved scripts sent to pharmacies, medical certificates and telehealth consults.
“InstantScripts has already had more than 500,000 Australian consumers use it and so is one which people might recognise,” he said.
“It enables consumers to get non-addictive prescription medication scripts sent to a pharmacy without having to go in for a physical consultation.
“They’re a great example of founders cracking the code, looking for capital to accelerate growth and we’ve been helping them do that.”
Australia and New Zealand exciting tech oasis
Wilson said the likes of Xero, Atlassian and Canva have helped to put Australia and New Zealand on the map in developing world-class tech companies.
“There’s now been a lot of tech companies demonstrate what can be done very successfully from Australia and New Zealand,” Wilson said.
“That concept of ‘you can’t be what you can’t see’ is now gone and now there’s many examples such as Canva or Atlassian where Australian and NZ companies are saying we can do that too.
“The pipeline of tech business founded over the past decade is broader and higher quality than it has ever been in Australia and New Zealand and by quite a long way.”