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Thread: Serko

  1. #1
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    Default Serko

    Another potential IPO on the NZX - targeting September 2013

    http://www.stuff.co.nz/business/8661...stock-exchange

    Corporate travel software developer Serko is aiming to float 25 per cent of its shares in September to raise $20 million of expansion and R&D capital.

    [...]

    The platform enforces corporate travel policies and helps manage risk as well as increasing productivity.

    Serko's main product, Serko Online, is a cloud-based corporate travel booking engine that Grafton says is number one in market share in the Asia-Pacific region.

    Serko has an impressive local and international client base, but remains little known, despite picking up a number of awards and funding from government development agencies.
    http://www.serkoonline.com/
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    Looks promising.
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    Sparky - Agree. But still good that more options are presenting itself to investors on the NZX.

    Re SLI, I have been doing a bit more reading following that article in the NBR. CAC is 2.2 years forcasting to drop to 2.0. Churn isn't bad but that is still a long time before you start making a profit, especially at 75% margin.

    Sparky - I think you have said you have a few private (angle type) investments. Are any of these in the SaaS space or is your research in this area due to what you have done on Diligent?
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    Question Was it really six years ago

    Serko are a well established company in their space, I remember first using their stuff back in 2007.

    The devil is in the detail of course so until some hard numbers are available I will assume this is a 'possibly reasonable investment'.

    Best Wishes
    Paper Tiger

    PS Serko was replaced by the competitor that our parent company used: I have a few stories about that.
    om mani peme hum

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    yeh my ears perked up this morning when i was reading that article... looks interesting from where im sitting, article mentions the $20m could be used for acquisitions, i wonder what they might be? i wouldnt imagine there are many competitors in this market locally?

    I really need to expand my portfolio....mineral companies are killing me with the gold price at the moment

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    Quote Originally Posted by SparkyTheClown View Post
    ........I'm really concerned that we are starting to see the headlong rush into companies whose fundamentals aren't being properly considered, in industries with significant risk (software startups). In 2011, people were religiously scrutinising investments, caring about profits and performance. Now.... oh well, it's a tech company. Just invest in it.

    What's the worst that can happen....?
    This trading behaviour is one of the signs showing a mature (last stage) Bull Market Equity Cycle

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    http://www.serkoonline.com/about-company.html

    just reading up about the company now, looks like they must have a solid expansion plan in place...however im worried they would do another share offer later down the road when they have ran out of money and dillute the shares again...

    Also reading about management and all their years experience...from my experience someone working 25 years in the NZ IT industry means Jack! I could be more competant in a managerial capacity than them and I'm 24.

    Im cautiously optimistic, but i really want to look at the numbers before i make my mind up. Its quite an interesting opportunity, maybe Paper Tiger can tell us some of his stories

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    Quote Originally Posted by CJ View Post
    Looks promising.
    Promises are easy CJ.. Any one for WDT or Rakon. ??..

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    Quote Originally Posted by SparkyTheClown View Post
    That's right. Just give a software company that doesn't make profits $20m to go out and make some undefined acquisitions. Just trust the unknown company directors and their board.

    Arguably you would be better to invest in the acquisition target!

    I'm really concerned that we are starting to see the headlong rush into companies whose fundamentals aren't being properly considered, in industries with significant risk (software startups). In 2011, people were religiously scrutinising investments, caring about profits and performance. Now.... oh well, it's a tech company. Just invest in it.

    What's the worst that can happen....?
    A good post Sparky.. Especially if only for the reason that we have had quite a number of " newbies " join this illustrious Band of Brothers.. Over the past months..

    Whom I will hasten to add are very welcome.. :-))

    DYOR !!!..

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    Quote Originally Posted by CJ View Post
    Looks promising.
    Quote Originally Posted by janner View Post
    Promises are easy CJ..
    I just want to point out that I was not saying that I would definitely be investing. Its the option to be able to invest that I find promising - a diverse range of companies on the NZX is better than a few ex SOE's.

    I wont start up another thread since Kiwiyo is 3 years away from an IPO (http://www.nzherald.co.nz/business/n...ectid=10883175) but I just want to say that this guy has done well for himself
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    Quote Originally Posted by SparkyTheClown View Post
    It will be interesting to see Serko's metrics like

    1. Lifetime value of a customer (ideally three times plus the cost of acquiring a customer)
    2. How many months to recover of the cost of acquiring a customer (Months-CAC or CAC recovery)
    3. Customer churn
    4. Average Monthly Revenue per user or customer (ARPU)
    There is more at the website below

    http://www.forentrepreneurs.com/saas-metrics/
    Thanks for sharing the metrics and link, good solid advice.

    I am interested to know how you chase down some of the hard to find figures? In particular the CAC. It seems to me that the SaaS companies I have been researching are not publishing that information. Do the investor relationship contacts divulge it willingly?

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    Serko is a corporate travel platform play for corporates. These are typically at the larger end of town ~ 500+ employees. This is the sweet spot and where the true value can be shown by their software. If you think about corporate travel this includes, flights, taxis, hotels, restaurants etc. Serko provide the lowest possible travel costs and highest efficiency. The potential is massive and having a partnership with the 2 best companies in the industry provides other opportunities. The technology is shifting towards mobiles and a good place to understand where this is going is to look at the www.kds.com website which is a partner. Think best in class travel platform (check out KDS Neo overview) for any corporate travel. This may take a few years to play out due to customer aquisition but once they are locked in it is very sticky. Revenues are earned from throughput and typically take 2+years per customer to fully implement, but once it is fully utilised company wide it is a money machine.

    I dont understand the SLI value prop but I get this one. Definitely in for this one=)
    Last edited by Schrodinger; 13-05-2013 at 09:42 AM.

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    This will depend due to the time it takes to fully implement the system in a company. You could actually say they have 2 customers; the company and the users in the company. Usually the company will 'mandate' the systems usage and enforce it through corporate policy but this can take time to fully implement. The metrics will look average at the start due to this but improve as throughput is achieved.

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    Looks like all tech stocks atm are doing quite well with no significant news, I'm wondering if SERKO will do the same.
    Wynyard looks like it could go to $1.5 soon.
    Is it because everyone is taking a tiny nibble hoping its the next Dil and XRO?

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    This is definetly one ill be keeping a eye on.

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