Yojee has really flown under my radar, but having spoken with the MD I must confess my interest is piqued.
At first glance, you have a cash burning business, being sustained via repeat capital raises, using terms like AI and Blockchain and generating a measly $1-2m in revenue -- and trading on market at (at best) 30x sales! It also came about via a reverse listing after a gold prospecting company decided on a pivot... It also seems to share a few things in common with GetSwift.
So, yeah, a few red flags.
On closer inspection, though, that seems like a fairly unfair characterisation.
The logistics market is highly fragmented, especially outside of the US, with a lot of separate entities responsible for delivering your package from producer to your door. It's a very complex chain, and the well known names (Wisetech, DHL, SAP etc) tend to operate within specific areas. Yojee focuses at the intersection of enterprise forwarding, last mile delivery and 3rd party tracking. Here they are the only player of scale and are used by 4 of the 10 largest 3rd party logistics provides (soon to be 5 by the sounds of it)
The company is very much focused on the SE Asian market -- an area responsible for 50% of the world's logistics. In terms of their tech, they plan to broaden more into an IoT (internet of things) offering, but outside of that want to remain focused on their existing niche. They have no ambition to move into the US, with Ed saying they have the potential to be a multi-billion company even if they just win in this region.
They seem to have spent a good deal of time on refining the offering, and the focus going forward will be ramping up sales and marketing (likely a growth in headcount of 4-6 people). Implementation for their offering has been reduced to weeks, where it was previously months.
Ed talked a bit about network effects, which I think could be significant. The more operators using the platform, the more valuable it is -- especially as there are marketplace features (eg i could add my two truck delivery company to the platform). I think having some big name partners also helps a lot.
A key value prop is that it allows users to invoice and get paid sooner, as well as streamlining operations and improving efficiencies.
They have a very small base of revenue, but are regularly posting 100%+ rates of growth YoY at each quarter. I expect cash burn to remain around $5m or so per annum, especially with an increased S&M spend, but at least they have a decent cash balance and they should be able to avoid another raise for another couple years (excluding any major spend or acquisition).
Like I said, 30x sales is waaay up there. Especially in this market. But the company is still at the very start of ramping up and these metrics can be deceptive when you're growing from a tiny base.
Honestly, with a $60m market cap, as I said in the chat, a takeover doesn't seem off the cards. As Ed said, this seemed to be hinted in the AFR recently. (not that you'd invest on that basis!!!)
I don't have shares, and as a matter of principle I don't buy within a few weeks either side of a Strawman meeting, but i'll add it to my watchlist. If they can sustain high rates of sales growth, win some big contracts with significant players, manage costs and cash burn well, then it really does the potential to be a much larger business in the years ahead.
Keen to hear what others think.
