Getbusy - "Not sure what’s exactly the pitch here"
The elevator pitch is that the company has a profitable division (Virtual Cabinet) that is subsidising their growth in another (Smartvault). They deliberately have operated near breakeven to scale their business over time in a cash neutral manner, which, due to advance billing has historically been an accounting loss.
They have had very mixed results on their investment in the past few years and just recently have told the market in their 2024 results that "Our SmartVault business has reached a scale at which it will generate rapidly increasing EBITDA margins and cashflows over the next couple of years.".
The management has a VERY strong divestment incentive to sell the company for 70-150m GBP by year end 2029. I know for a fact that they have turned away many lowballs, otherwise this probably would've gotten bought out some time ago.
To make the business more strategically viable for acquirers they have worked on making it more enterprise-grade and partner-led which has caused an outflow of subscribers and slowing growth, but retention rates have improved, ARPU increased dramatically, and they have embedded themselves within the ecosystem of giants such as Intuit, Turnkey IPS, and Netsuite whilst partnering with the likes of Rightworks etc.
Getbusy - "Not sure what’s exactly the pitch here"
The elevator pitch is that the company has a profitable division (Virtual Cabinet) that is subsidising their growth in another (Smartvault). They deliberately have operated near breakeven to scale their business over time in a cash neutral manner, which, due to advance billing has historically been an accounting loss.
They have had very mixed results on their investment in the past few years and just recently have told the market in their 2024 results that "Our SmartVault business has reached a scale at which it will generate rapidly increasing EBITDA margins and cashflows over the next couple of years.".
The management has a VERY strong divestment incentive to sell the company for 70-150m GBP by year end 2029. I know for a fact that they have turned away many lowballs, otherwise this probably would've gotten bought out some time ago.
To make the business more strategically viable for acquirers they have worked on making it more enterprise-grade and partner-led which has caused an outflow of subscribers and slowing growth, but retention rates have improved, ARPU increased dramatically, and they have embedded themselves within the ecosystem of giants such as Intuit, Turnkey IPS, and Netsuite whilst partnering with the likes of Rightworks etc.
(I am a shareholder, and have been for ~3 years).
Thanks for the insights, that definitely sounds interesting.