GeoOp latest tech darling as shares soar on NZAX debut

CEO Leanne Graham and chairman Mark Weldon

GeoOp [NZAX: GEO], whose software allows small businesses to manage their workforce, soared 140 percent in its debut on the NZAX after it sold shares in a private offering, raising $10 million to fund its global growth.

The shares first traded at $2.40, having sold at $1 apiece in an offering the company says was more than three times oversubscribed, and has been volatile in trading since then, trading as low as $1.38, before settling at $2, valuing the company at $54.5 million.

That compares to a listing value of about $27 million. The company had revenue of $124,000 in the year ended March 31, for a loss of $312,000, according to its last annual report.

Chief executive Leanne Graham said users of its software as a service, which costs $20 per mobile user, climbed to 4,500 in September from 1,600 in January. About 55 percent of its customers are in Australia and about 17 percent in North America.

Graham owns about 23 percent of the company, according to Companies Office records, behind Nicholas and Russell Bartlett with 24 percent. Chairman Mark Weldon, former CEO of NZX and now a central Otago wine maker, owns 6.6 percent via his company Terra Sancta Ltd.

The company said its mobile software was typically targeting sole traders in small to medium sized businesses with up to 200 field staff. Its software is available via the Apple App store, Google Play and its own website.

The software helps small businesses manage "every part of their work, from creating to viewing a job, to assigning and scheduling it, creating quotes, accessing parts lists, carrying out the job and completing the invoicing and payments process," the company says.

GeoOp was advised by investment bank Cameron Partners and law firm Bell Gully.

(BusinessDesk)

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18 Comments & Questions

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Do you have a link to the annual report? And to the prospectus used for listing? I cannot see them on the companies office or GeoOp websites.

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Hi Lance - NBR put your question to GeoOp. A rep replied:

When there was the initial private offer: Subscriptions for shares by “eligible persons” are exempt from most of Part 2 of the Securities Act (including the requirement for there to be a Registered Prospectus and for an investor to receive an Investment Statement in respect of the shares).

CFO Stewart Reynolds has noted:

1) Annual report - https://www.nzx.com/companies/GEO/announcements/243108

2) Disclosure documents https://www.nzx.com/companies/GEO/announcements/243107

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I think they are going to do OK but the numbers either don't add up or they are going like a rocket ship (hopefully the later)...

“1,600 [users] in January” at $20 user/month = Jan-Mar revenue of 96K (taking no growth). Which means 124K - 96K = 28K revenue for April - December 2013. Did all the growth come in Jan - March?

And current MRR ~ 90K/month (4.5K*$20)

Or does users != paying users?

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According to coy docs doing $27k a month. 4, 500 are paying customers but lots on cheaper rate. $20 is the new price. They say breakeven at 40-60k users. A long way to go.

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Good pick up Glen, I suspect like any new launch software you will have Beta clients that receive discounted pricing to obtain scale. May also be some free look trials in the numbers that if roll into regular payments will see the numbers raised.

Seems like a good product though on the surface.

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The company has been going since 20 May 2009 and the software has been on the market for at least 3 years. Hardly beta software you would think.

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My guess is that included in the revenue numbers will be government grants which makes the picture even more interesting.

In addition I think they raised 2-3million a year or so ago. So suspect they are losing more than $300k now.

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The top user review on the google play store, the Apple app store, muliple blog sites and industry websites are all from a certain Mr Chris Dwyer. According to companies office records he holds approx 200k shares in the business. One would think good practice would be to disclose your potential conflict of interest before posting reviews written in the style of a 'customer review'. Perhaps a case of trying to talk your own investment up?

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Unfortunately GeoOp has little differentiation from the other 28+ apps in the Xero add-on store that do workforce management. #itsnotthenextxero

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This must be a startup 2.0 or as they say in the US they have done "The Pivot". 1.6k users and 124k revenue? How can you run support for a new (buggy) product with 1.6k users (say actually 300 low-tech customers) from an office which costs 8k/annum? The numbers just do not add up.

But as has been said before.... If the ducks are quacking, feed them....

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Another flash in the pan tech IPO that would NEVER occur if the market weren't in an over inflated bubble that will burst in due course. There will be tears.

You really have to question the lack of ethics and morals from the advisors and even to a certain extent the NZX itself for letting companies like this list. We should encourage and celebrate companies like Sylaitt and other mid sized firms - not ones that pray on unsuspecting mums and pops for overpriced investment capital.

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Technically it was a compliance listing, no money was raised from the public, only from sophisticated investors pre listing. And it has listed on the NZAX which is suitable for a company like this.

Now the question is why have investors/traders/speculators pushed the price up over $2 when $1 seemed a more realistic price for a punt.

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There are 1,000s of apps that offer the same functionality. this is the definition of a better mouse trap.

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As we all know, and Mr Wiggs found out recently, investment in NZ is a messed up landscape where if you get the right influencers into your fund raising and enough hype, all the investors follow like ducks following their mother. If you don't have the right networks working for you, you're shut out. Looks like GeOp was on the right side but how they raised this much for what they are seems weird to me. Good luck to them. Time will tell.

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Better Mouse Trap...not sure if its better or not.

Check out these guys www.simpro.co.nz

Where is Geo-OP's uniqueness?

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Quite a large setup fee on simpro John....

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Or how about the others with no setup fees:

ServiceM8 www.servicem8.com.au
Ascora www.ascora.com.au
...

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Check out www.servicem8.com or www.itrade.net or https://fergusapp.com/

All the same and all connected to Xero. Crowded space I'd say!

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