Was just about to explore Ansarada and found it looks like the company has plans of selling 100% of its share to Datasite. I got as far as snooping around the website, opening a free login etc.

Business: SaaS Platform with products used by companies, advisors and governments to govern their information and processes in Deals and Transaction Management. Board Management, Compliance and Tenders. Enables organisations across the glove to be run efficiently, with reduced risk and an ability to make decisions.

Basically a Dropbox or OneDrive on steroids.

Mkt Cap $217M

https://www.ansarada.com/about

In over 180 countries

Now ASX announcement: This was posted 13 Feb 24: Ansarada enters into Scheme Implementation Deed with Datasite

It seems the plan is to buy 100% of the share capital:

https://www.ansarada.com/investor-relations

Suppose I'll revisit my approach..

The Good:

• Back to cash flow positive after the previous negative quarter, with management indicating that continued improvement is expected over H2.
• Expenses remaining reasonably flat.

Not So Good:  

• Freemium users are growing rapidly but paid subscriptions are going backwards. Ansarada is currently struggling to convert additional paid users to their platform. I’m not sure if this is an issue with users finding value in the product or just that there is enough of the platform available for free to meet users needs. The decrease in subscriptions indicates that currently my thesis for the company is broken. I was expecting continued moderate growth and if they are struggling at this point, I am not certain that growth can be maintained over a longer period.
• The business is clearly impacted by wider market weakness and M&A cyclicality, with revenue growth impacted over the last several quarters.



• The addition of new metrics to improve reported outcomes. Reporting on ARR is a useful measure, and it’s good to see that it has improved 45% YoY, but previous paid subscribers and ARPA was the chosen performance metric.
• Ongoing issues with reported metrics. Once again Ansarada is changing figures retrospectively as they have incorrectly classified subscriber types. I flagged this as a potential issue awhile back.

What To Watch:

• I will continue to watch the company, and a key indicator that there may be an improvement in conditions is when there is a shift from freemium to paid subscriptions along with continued growth of the non deal customers

Announcement 28-07-22

The Good:

• Reported active customers continued to grow to 5251 with 2851 subscribers. Increased growth of overall users to the platform even if they are inactive or freemium still increases exposure and provides potential conversions to active subscribers.
• Slight revenue increase of 6.6% over the previous quarter, however still down on Q2 revenues. Just inline with my forecasts, however, these may need to be adjusted down to allow an increased safety factor in my assumptions.

• Approx $1.5m in free cash flow.
• GRC makes up 15% of revenue vs 11% prior quarter

Not So Good:  

• Subscriber growth is still much slower than active customer growth.
• ARPA flat for the quarter.
• “Subdued M&A market affecting volume”. The current overall macro conditions in the markets are unlikely to change significantly in the near term. The significant drop off in tech multiples may pave the way for increased activity, however with capital markets changing M&A activity is likely to remain “subdued”

What To Watch:

• Can AND maintain growth outside of record M&A tailwinds? Continued lumpy quarterly revenues will likely shine a light on a potential exposure to market cycles and be another warning sign going forward. The growth in GRC revenue mix will be another indicator.
• Still sitting on $22.4m in cash. As the business continues to improve its FCF, investing activities will continue to be offset by operating cash leaving the pool of capital for other uses.
• Investor slides say increased scale in offshore markets. The full year results will need to be looked at in terms of markets split to identify how much international growth has contributed.

The Good:

• Reported active customers are up to 4535 from 3559 in Q2 which was a key point to watch from the last quarter. Which is a QoQ growth of 27%. But. If you look at the footnotes at the end of the report this number includes the freemium users which previously haven’t been reported. Subtracting these out, the active customers is at 3778, which is closer to 6% QoQ growth, which is still a reasonable number and an improvement on the previous quarter.
• Free Cash Flow positive for the quarter (marginally) and strong cash position remaining at $21m
• ARPA up to $1661 from $1408 (up ~18% QoQ). As this metric keeps improving its an indicator that there is uptake in the wider range of products / improved pricing.

Not So Good:  

• Mixing reporting metrics and cherry picking of data to provide improved numbers is a mark against management for me and a definite warning sign going forward.
• Subscriber number growth is much slower than active customer growth sitting around 2% QoQ.
• Revenue down 9% QoQ. Attributed to seasonality. Not a major warning sign taken in an isolated instance but needs to be marked to check back against management comments.

What To Watch:

• The reduced quarterly revenue was attributed to seasonality in payments, so this will need to improve in Q4 or that will be another warning sign that the thesis is broken.
• Continued customer growth and conversions. Monitor freemium as % of total user growth (Currently sitting at ~70%)
• Revenue on track for close to $50m for FY22
• Announcements / Business commentary around addition of new product features - Modularisation of products, AI Search, additional GRC modules.

I have started a bit more of a detailed look into Ansarada’s competition and rankings amongst its peers as a way of monitoring the company going forward as it continues to grow and try to win more market share. First thing to note is that it’s a crowded sandpit they are playing in. A search on capterra for Virtual Data Room returns 94 results.

Some positive news is that in a search across several different ratings sites Ansarada generally came back within the top ten and has a lot of positive customer reviews. In terms of ratings there is generally little separation among the top players, except for the fact that iDeals is consistently nominated as the number 1 product. 

As there is little separation, several factors that will be key in Ansarada continuing growth and need to be monitored:

• Advertising Spend and online prominence

• Ongoing addition of features and refinement of product.

• Subscription Cost

Another way to track how Ansarada is performing in the market is to track ongoing changes in the metrics measured by software review site G2:

G2 Satisfaction Score - 55

Ease of Use - 90%

Meets Requirements - 93%

Ease of Doing Business - 93%

Ease of Setup - 91%

Quality of Support - 90%

Ease of Admin - 89%

Next step will be to explore why iDeals is top of all the charts and how Ansarada compares directly.

Disclosure: Held

Not so much a commentary on the numbers, but more a commentary on management culture.

I had been an investor in the TDY IPO, which looked promising given the virtual dealmaking platform with sticky customers.

COVID should have been an opportunity to aggressively grow, even if it the timing was awful. I doubled down at the March 2020 lows and did very well on paper with an intention to hold long.

The Ansarada merger was a big let down for those who were long - trading was suspended for weeks, and the merger price resulted in my hold losing 30% of its value after AND started trading.

The culture of Ansarada has been commented on elsewhere, but in short, it's scathing. I am also not surprised that customers are not sticking around after a transaction, and they've got a long way to go to unseat the market leaders (with Docusign being the big gorilla).

Management culture isn't everything, but it gives you a window into how the company is run. Ultimately, I sold out after losing faith in management and their disregard for retail shareholders.

Reverse listing via TDY (thedocyard) seemed odd but maybe not surprising given the circumstances in which it happened - original IPO fell flat during Covid.

Still a new listing and combined entity only 6 months old. Microcap with Market Cap only ~$150m.

Some Glassdoor reviews were scathing of leadership, although this is not necessarily uncommon in fast growing start-ups. This question mark over culture needs to be monitored.

Difficult to get a handle on competition.

Fund managers / Industry insiders will likely have more of an edge than retail investors so pricing of AND shares could be relatively efficient?

Execution risk remains with more deployment of features planned.

Disc: Held

Ansarada provide virtual data rooms on a SaaS platform for M&A Due Diligence.

I have followed since Pre-IPO after being impressed with Sam Riley (founder CEO) partnering with and presenting at Wholesale Investor conferences.

Founder Management Built from scratch over 15 years and retain skin in the game (28.5%) including CEO (5.6%), named after founders – SAm Riley is the SA in anSArada I think?

Chaired by Peter James (also chair of MAQ & NEA), well connected Aussie tech veteran.

Numbers are from today’s (27-Jul-21) Prelim FY21 results webinar - Gross Margin 96%, Cashflow marginally positive in Q4, although marginally negative over FY21. Customer growth up 31% in FY21 and expected to continue apace in FY22. EBITDA up 78% YoY, Operating Cashflow up 31% YoY.

Still innovating and releasing new features with great customer feedback.

M&A volumes have been high and tailwind seems strong at the moment, which makes sense given the disruption from Covid and cost of capital being so low.

Disc: Held