The IPO pathway to AIM for ambitious growth start-ups remains open even just a week ahead of Christmas. Trading has kicked-off in shares of data analytics hopeful Pelatro (PTRO:AIM) on the junior market today.
The company has raised £4.6m with the aid of broker FinnCap at a placing price of 62.5p, giving Pelatro an opening £15.2m market value.
London-headquartered Pelatro provides what it calls ‘precision marketing software’ to mainly telecoms service providers. Its analytics engine scrutinises customer behaviour from different points in the network to help telcos create custom promotions and marketing campaigns.
IT’S ALL ABOUT THE DATA
It is the fact that Pelatro crunches the numbers and analyses the data which makes it sound potentially interesting. Presumably, down the line, it may be able to point its data skills at other markets too, perhaps ones not quite so dominated by very large, and often quite slow moving, end clients.
So far, most (if not all) of its revenue comes from overseas. All of 2016’s full year $1.21m revenue came from customers in the Bahamas, Morocco and Bangladesh, on which it made $0.5m of earnings before interest, tax, depreciation and amortisation (EBITDA).
2017's first half (to 30 June) shows significant improvement, Pelatro reporting $1.04m of EBITDA on $1.55m of revenue.
LOTS OF NEW START-UP FACES
It’s a been a half decent year for technology start-ups coming to AIM, in number terms. Today also sees in-video adtech specialist Mirriad Advertising (MIRI:AIM) arrive, while last month it was cloud security infrastructure company Beeks Financial Cloud (BKS:AIM).
Before that we saw app store data cruncher Appscatter (APPS:AIM) join AIM in August following Israeli company Ethernity Networks (ENET:AIM) in June. It designs virtual and software-based communication networks technology.
So from different parts of the technology space. What they mainly share is a limited trading history with little financial performance metrics for investors to chew over.
HIGH RISK OPPORTUNITIES
While we wish them all the best it is a pretty safe bet that not every one of these early stage growth company hopefuls will be successful. And those that are will probably take longer to find their feet than expected.
Perhaps the National Lottery is sensible analogy; you can’t win if you don’t buy a ticket… but then the odds of winning are 45 million to 1 or so. So investors beware. These represent high risk investment opportunities.