8common raises US$3.3M in IPO; to be listed on ASX tomorrow
Upon listing, 8common will have a market capitalisation of A$13.5 million based on a A$0.25 issue priceBy Dhaleta Surender Kumar 26 Aug, 2014
Sydney- and Singapore-based software developer 8common Limited (8common) has raised A$3.5 million (US$3.3 million) through its IPO listing on the Australian Stock Exchange (ASX). The company will be officially listed on ASX tomorrow, with a proposed code of 8CO.
The company operates in Software-as-a-Service (SaaS), primarily in the development and distribution of two established software solutions: Expense8 and Realtors8. The solutions help companies, their employees and professionals control costs, boost productivity and in the case of Realtors8, generate leads.
Accepting applications for 14 million shares at A$0.25 each from investors, the issue, as per the company, was oversubscribed. The raising was largely taken up by sophisticated institutional and retail shareholders. Sanston Securities Australia was the Lead Manager of the offer.
Upon listing, 8common will have a market capitalisation of A$13.5 million (US$12.5 million) based on A$0.25 issue price.
Commenting on the company’s successful IPO, Nic Lim, CEO, 8common, said, “We are delighted to have successfully completed the IPO for 8common, and particularly pleased with the strong level of investor interest out of Australia and Asia that resulted in the offering being well oversubscribed.”
With the raise now complete, 8common is looking forward to finalise the listing process tomorrow, and rolling out the company’s strategy. “We have a clearly defined execution roadmap for both continued expansion within our core markets in Australia and North America and growth markets in Asia where we can leverage existing clients in Hong Kong and Japan,” Lim added.
Besides, the company hopes to reduce its debt by the repayment of A$1.8 million (approx. US$1.7 million) of convertible notes together with accrued interest of A$54,000 (approx. US$50,000) including A$1.27 million (approx. US$1.2 million) of convertible notes and A$38,100 (approx. US$35,400) of interest.
Approximately, A$545,500 (approx. US$507,000) will be used to pay the cost of the offer; A$150,000 (approx. US$139,000) for product development; A$150,000 (approx. US$139,000) for marketing programmes and activities to identify and build the distribution network; A$300,000 (approx. US$279,000) for growing the Business Development and Sales division; and the balance of A$500,500 (approx. US$465,000) will be made available for working capital requirements to drive customer acquisition.
After the IPO, Lim will have a 20.8 per cent stake in the company. Meanwhile, ICT industry veteran Larry Gan, who is also one of the Directors of 8common, will have 7.8 per cent stake. However, the second largest stake after Lim will be held by ZenYen Limited (16.6 per cent).
8common largely operates in customer relationship management (CRM) and enterprise resource planning (ERP) — two largest sub-segments of SaaS. According to an 8common commissioned report by Frost & Sullivan, CRM was estimated to account for 39 per cent of Asia Pacific SaaS expenditure in 2013, whereas ERP accounted for 15 per cent — with market sizes of US$1,126 million and US$430 million respectively.
Whilst adoption of SaaS in Asia Pacific is generally lower than in North America or Europe, the market for SaaS in Asia Pacific still is growing strongly. Frost & Sullivan independently forecasts that the market will grow from approximately US$2.9 billion in 2013 to reach US$12.1 billion in 2018, at a CAGR of 33 per cent.
Besides Singapore and Australia, 8common has employees in Canada (Vancouver) and a dedicated outsourced team in the Philippines (Manila).
Disclaimer: Nic Lim, CEO of 8common and Partner in 8capita, is one of the investors in Optimatic Pte Ltd, the parent company of e27