Finding the Next Xero
In saying that, we discuss a few interesting up and coming NZ Tech companies below – as we are all looking for the “next Xero”. Kiwis are often regarded as relatively risk averse, which has seen several tech start ups prefer to list on the ASX where there has generally been greater appetite for the risk associated with early stage tech investments.
While it is good to see some more tech names on the NZ market, technology is still an underrepresented sector by global standards – technology stocks make up about 1% of the NZX 50, while accounting for 15% - 20% of the US stock market capitalisation (depending on which market index you refer to).
Behind the success of a number of tech stocks in recent times – think Xero and WiseTech Global on the ASX, is the software as a service (SaaS) business model. The model is called software-as-a-service as it delivers a cloud-based service (such as an online accounting platform) that users can subscribe to in return for a monthly/periodic fee.
For SaaS providers, the business model has several advantages over the business models of traditional companies.
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