Much like Stakk yesterday, the Kinatico story is about a business pivoting away from its original model to leverage its tech investment in a new way. The key difference is that Kinatico is further along in this journey and has already demonstrated early success.

Michael appeared to have a very level-headed approach, ranging from making tough decisions and applying sensible capital allocation frameworks to envisioning the business's long-term future. He frankly admitted to early missteps and acknowledged (unprompted) past errors regarding over-promising and under-delivering. It was also clear that the focus is squarely on solving customer pain points in the most user-friendly manner possible.

He also offered a very practical perspective on AI and its specific application to the business, devoid of the usual fluff or hype.

The business seems to be in a strong position, with a right-sized cost base capable of significant scaling; Michael believes the current cost structure could sustain double the current revenue. They boast a healthy balance sheet, positive operating cash flow, and extremely sticky customers. While it is early days for the SaaS model, churn sits at 0% so far.

He used the phrase "the overnight success that's been 18 years in the making," which I liked (I use a version of it regularly!), but the point was that they seem to have reached a stage where they possess a commercially ready product set, are self-sustaining with plenty of runway, and now simply need to execute on the operational front.

Shares are trading at ~7x recurring revenue, which isn't excessive provided they can sustain recurring revenue growth and further unlock their operating leverage.

I'm going to add a small watching position.

You can interrogate the transcript here: Kinetico Transcript.pdf

Here are some AI generated notes from the meeting:

Corporate Evolution and Strategic Pivot

• Transformation from CV Check: The company has successfully evolved from "CV Check" (a transactional background screening provider) to Kinatico, a broader RegTech SaaS platform. This move was driven by customer feedback requesting easier compliance management rather than just raw data.
• Solving the "Excel" Problem: Their primary competitor remains the spreadsheet. Kinatico’s value proposition is replacing manual, error-prone Excel processes used by companies to track workforce compliance.
• Focus on Usability: Unlike competitors who focus strictly on the regulatory requirements, Kinatico focuses on the user experience of the staff managing compliance. The goal is to minimize distraction and overhead for the client.

Business Model and Sales

• Frictionless Onboarding: They have removed barriers to entry by offering month-to-month contracts (no lock-ins), a free tier for up to five users, and unlimited free admin seats. The pricing model is a simple "per worker per month" fee.
• Zero Churn: Since launching the SaaS product, the company reports zero churn, attributing this stickiness to the product's daily utility and the lack of restrictive contracts.
• "When Harry Met Sally" Effect: Sales are seeing a network effect where winning a client in a specific sector or suburb (e.g., aged care) leads to inbound inquiries from neighboring businesses due to word-of-mouth.
• Self-Serve Focus: While enterprise pipelines are strong, current growth is heavily driven by self-serve signups, which lowers the cost of sales.

Operational Efficiency and Financials

• Massive Operating Leverage: The company has reduced headcount from ~134 to 70 while simultaneously doubling revenue. Management believes they can double revenue again without increasing the current headcount.
• Capital Management: The business is profitable, debt-free, and cash-flow positive. They do not capitalize operational spend; normalized CapEx is expected to be between $3m–$3.5m annually.
• Transactional vs. SaaS: The traditional transactional revenue (background checks) is expected to decline as a standalone product but is being integrated into the SaaS offering, reducing the need to constantly "re-win" customers.

Technology and AI

• "AI First" Philosophy: The company has adopted a practical AI strategy. This includes using AI to enhance internal staff productivity (Ivanchenko uses AI for 30-40% of his day) and upcoming product features, such as allowing clients to query compliance data using natural language prompts.
• Digital Identity Stance: Management views the inevitable government rollout of digital identity as a positive tailwind. It would remove the cost and security burden of biometric identity verification from Kinatico’s platform, allowing them to focus on higher-value workflow automation.
• Moat: The competitive moat consists of 18 years of accumulated domain knowledge, deep integrations with government databases, and the difficult-to-replicate nuance of making complex software feel easy to use.

Growth Targets and Expansion

• Revenue Goals: The medium-term target (3-5 years) is to reach $75m–$90m in revenue, with 80% derived from SaaS.
• International Strategy: The US is not a priority target due to the complexity of state-by-state regulations. The focus is on Southeast Asia, utilizing a partnership/JV model rather than opening physical offices.
• M&A Criteria: The company is open to inorganic growth but remains disciplined. Targets must be accretive (no "basket cases") and provide either access to a new customer segment or product acceleration.
• Future Vision: While currently focused on workforce compliance, the platform is effectively a digital workflow engine that could eventually be applied to any form of compliance beyond just people.

Discl: Not Held

SUMMARY

Financial position is very impressive

TAKEAWAYS

The key questions for me now are (1) how is this growth going to be sustained to justify the current PE multiple (2) how long will the current growth run for before it plateaus

The current 124x PE feels very expensive against the backdrop of (1) not a clear monopoly/semi-monopoly (2) uncertain longer-term growth opportunities (3) sterling growth in the last 3 years

REVENUE

Revenue is growing

The legacy transactional Criminal History check is flatlining, Other Checks are in decline

Exponential Growth has come from the Workforce Compliance SAAS products since the BPT acquisition and its subsequent enhancement/re-branding - the market is clearly rewarding KYP for this

Growth is exclusively in Australia - NZ has been completely flat in the last 5 years, despite the workforce compliance products

PROFITABILITY

Nice inflection to profitability, EBITDA, NPAT and EPS

BALANCE SHEET AND CASH

• Balance sheet is clean - $10.2m cash, no debt
• Increasingly positive cashflow from operations - $5.3m in FY25
• Overall cash flow also rose to $0.4m in FY25 from $0.13m in FY24

Discl: Not Held

Went through KYP’s major announcements going back to FY2021 to get a better understanding of how the company, and its strategy and execution thereof has evolved since.

SUMMARY

• Prior to FY2021, CV1 (as it was then known) was mostly focused on pre-employment background screening
• A step change occurred in Feb 2021 when CV1 acquire Bright People Technologies (BPT) which added “credentials-based workforce management capability”, via BPT’s 2 SAAS software modules - Enable Enterprise and Cited moving CV1 from a wholly “pre-employment background screening” provider to a “full-employment lifecyle” provider
• International expansion has been flagged since early 2021
• “Growth into North America and Europe in 6-24 months” was flagged in Sept 2022, then silence on this until Oct 2025
• Between 2023 to 2025, focus has been on maturing the workforce compliance product culminating in the announcement of Kinatico Compliance, its next gen product in Oct 2024, which was subsequently branded as “Compliance X”
• The Growth Strategy playbook was announced in Oct 2025 - continue to focus on small businesses in ANZ with 2 parallel tracks of (1) targeting mid-market & Enterprise and (2) Initial International expansion to South East Asia

MY TAKEAWAYS

• Confirms my sense that international expansion is still some time away and the footprint is unlikely to be big
• It does feel that there has been some sort of reality check as to KYP’s capabilities vs global incumbents in the US/Europe which resulted in the updated focus on South East Asia
• This pivot to SEA does not quite make sense to me given that (1) workforce regulatory requirements are fundamentally quite diverse and different across each SEA country (vs a mostly-similar Australia and NZ scenario today) (2) is not a natural extension from the current ANZ base (3) it does not feel that there is much in the CV1 legacy check and BPT modules that addresses non-ANZ requirements (4) other than Singapore and the Philippines, the language for regulatory compliance is the respective national language, not English.
• This is adding to my concern that KYP is going to struggle to expand beyond ANZ in a meaningful manner. The flat lining of NZ revenue amidst the strength in the SAAS revenue is a bit glaring - need to peel the reason for this.
• If KYP is “constrained” to a mostly ANZ scenario, taking the XRO experience, there will come a point where growth will plateau - I can’t see where the long term growth will come from to justify the ~124x PE it is trading at today 
• The other thought is whether (1) the easy runs have already been gotten with small businesses where ComplianceX is pretty much a no-brainer for the problems that it solves and (2) the pitch is likely to become harder to bat on from here, going after mid-sized and large enterprises where it is harder to penetrate and gain traction.

DETAIL

This diagram from the FY2022 AGM Presentation was helpful.

Feb 2021 - Bright People Technologies Acquisition

2 modules:

• Enable Enterprise - allows operators and contractors to run workforce compliance end-to-end:
• Identity and verification
• Onboarding and induction
• Deployment and re-deployment (logistics such as booking flights and accommodation
• Ongoing compliance monitoring and management
• Cited - next gen digital compliance and credentials management via a cloud-bases system, integrated within the customer supply chain, to create a digital credentials eco-system for whole-of-life management and portability
• This marked the start of KYP’s pivot to SAAS revenue

Nov 2021 -CGI Strategy

The “CGI Strategy” was presented by the then-new CEO Michael Ivanchenko in Nov 2021.

Mid CY 2022 - Thinking on Growth

I can see how this is valuable in an ANZ scenario - these are basic requirements that would mostly be done manually or not at all for smaller business.

The "unique advantages" did not inspire any confidence of KYP's ability to expand overseas, particularly against stong global incumbents in the US, UK and Europe. I felt the exact opposite ie. that overseas expansion in these markets were really a non-starter, with current capability.

FY23 and FY24

Silence on international expansion, heavy focus on building out and maturing the workforce compliance solution and adding value to KYP's SAAS product.

25 Oct 2024 - Kinatico Compliance announced

6 Mar 2025 - Compliance X is announced, focus is back on ANZ

6 Oct 2025 - FY25 AGM

• International Expansion returns, but ambitions have clearly been scaled down to SEA countries vs Europe/US 3-4 years ago
• Focus on larger enterprises instead 

Discl: Not Held IRL and in SM

Part 3 - Competitors, Domestically and Globally

In summary, at this point, my thinking on KYP:

• Not an obvious monopoly/semi-monopoly in the workforce compliance space - it looks like it has direct competitors. Its acknowledgement that their “Serviceable Obtainable Market” of 60-70% of TAM might be explicit admission of this. 
• Has clear and largish global competitors with their own international reach
• Appears small, size-wise, vs its global peers
• Not seeing an immediately obvious path to international expansion - is KYP merely an ANZ play, despite the noises it is making on “international expansion”.
• The $10m cash on hand does not seem like much to work with at all, given the on-paper scale of the global players - I would expect a capital raise to accompany any M&A

Need to peel the KYP announcements to confirm or debunk this continued scepticism.

Would appreciate any input/feedback from anyone who has followed KYP more closey and for longer as I am unsure if I am off course with my thinking thus far ...

DOMESTIC COMPETITORS

Kinatico sits in the workforce-compliance / compliance-management / RegTech niche. competitors fall into three groups: specialist workforce/credentialing platforms; broader compliance/GRC vendors; and general workforce/HR platforms with compliance modules. Representative competitors (examples with sources):

• Rapid Global — safety & compliance / contractor management solutions
• SafetyCulture (iAuditor) — operations & compliance inspections widely used across industries (competes on operational compliance)
• Donesafe / SAI360 / Donesafe-like GRC vendors — broader compliance and risk platforms used by enterprises. 
• CredEntry / other credentialing vendors — focused on credential verification / visitor & contractor credentialing (very direct overlap). 
• Large HRIS / HCM vendors (Workday, SAP SuccessFactors, ADP, Oracle) — not direct substitutes for deep compliance workflows but important competitors/partners because many customers rely on HRIS vendors’ modules or integrations. Kinatico lists many of them as integration partners.

(Industry listings and competitor aggregates also show Kinatico compared to Rapid Global, Nakisa, Redzone and others in third-party directories.) 

COMPETITOR FEATURE MATRIX (TOP 6)

Takeaway from Matrix

• Kinatico’s strengths: integrated screening history (CVCheck heritage), mobile worker UX and explicit HRIS integrations — good fit for regulated industries in ANZ
• Kinatico competes most directly with specialised ANZ credentialing/worker-compliance vendors (CredEntry, Cited within Kinatico group, Rapid Global, Donesafe) 
• SafetyCulture and SAI360 compete on adjacent functionality (inspections, enterprise compliance) and may win customers via broader operational or GRC footprints

CLOSE OVERSEAS COMPETITORS

Below is a focused list of non-Australia / New Zealand companies that offer products comparable to Kinatico (workforce compliance, contractor pre-qualification, credential verification, ID/KYC, background screening, mobilisation/logistics). For each I give the primary country (HQ) and a one-line note on the comparable product area. 

Key Notes

• Region matters: Avetta / ISN / Veriforce / Alcumus / Achilles already operate in many countries and have strong relationships with large corporates and asset-owners — they’re the firms a global miner/utility will ask about first.
• Partnership vs direct competition: Some identity and screening providers (Onfido, Jumio, Sterling, Trulioo) often partner with contractor management platforms rather than compete directly on full workforce-compliance stacks. Kinatico could integrate with (or white-label) these providers when entering new markets. 
• Regulatory & data localisation: entering EU/UK/North American markets typically requires local data-handling, chain-of-custody and compliance with local background-check laws — existing local players have operational advantage
• Africa & Middle East - higher barrier to entry due to local rules - must partner locally or buy licences; direct entry without local partnerships is high friction
• India - large TAM, but regulatory and fragmentation challenges

COMPETITOR MAP BY VERTICAL

Go-to-market competitor map by vertical and who dominates which vertical.

Vertical Competitor Map Takeaways

• Large asset-owners in mining, energy and infrastructure typically contract with Avetta/ISN/Veriforce/Achilles/Alcumus — these players are entrenched because they operate buyer-led networks or are aligned with procurement standards
• Background screening for hires and contractors is dominated by specialist screening firms (Sterling / HireRight / Checkr / Certn) that focus on speed, global data sources and API integrations. They are complementary to (and sometimes partners of) contractor-management platforms
• Identity/KYC providers (Onfido, Trulioo, Jumio, IDnow) dominate the document + biometric verification layer — often integrated into contractor platforms rather than replaced by them. 

CHAT’s “ADVICE” ON WHERE KYP CAN REALISTICALLY WIN INTERNATIONALLY

Adding this for completeness - not placing any reliance on these “suggestions”

• Target mid-market and regional subsidiaries of global firms first. Large miners/utilities typically use Avetta/ISN — but their regional operations and subcontractors can be won with faster onboarding, lower cost and better local integrations. (e.g., KYP’s ANZ vertical templates are a selling point)
• Partner rather than compete on screening / identity in new markets. Integrate with global screening (Sterling/HireRight/Certn) and KYC (Onfido/Trulioo/Jumio) instead of building local screening networks from scratch — this substantially lowers time-to-market and regulatory burden
• Focus on niche verticals where buyers value local/regulatory fit. Aged care, healthcare and regulated education environments prize local compliance fit (national police checks, healthcare registers) — win these by pre-baking local checks and workflows. 
• Use a two-track approach: (A) land-and-expand with mid-market clients via fast deployments and modern UX, (B) pursue 1–2 strategic global anchor customers (regional units of multinationals) to build credibility and integrations.

MY TAKEAWAYS

Domestically

• Appears KYP has direct competition, with various companies dealing with some or all aspects of the workforce compliance management space - need to peel what KYP’s market share is and KYP’s differentiator from its competitors 
• KYP’s own Serviceable Obtainable Market of ~60-70% of TAM also suggests that KYP’s is not quite in a monopolistic/semi-monopolistic situation

International

• There are big international players in KYP’s space in the US, UK, Europe and Canada with seemingly huge valuations in the US$b, and “relatively entrenched” positions, most of which sound like they have a global offering - prima facie, these look completely out of KYP’s reach to acquire given KYP’s market cap of ~A$164m. If anything, it raises the risk of KYP being acquired for the globals to geographically expand to ANZ - with those valuations, acquiring KYP would appear to be well within reach
• The smaller non-English speaking countries could be white space for KYP’s international expansion but these will come with its significant operational challenges - language, lack of standardisation, need for deep local knowledge etc
• I can’t quite see an immediately obvious and viable pathway to KYP’s international expansion - this was my very first risks when looking at KYP for the very first time. The evidence in this superficial dive seems to confirm this thinking rather than debunk it

QUESTIONS TO ASK

Q6. What is KYP’s thinking and plans around international expansion? In what space, region?

Part 2 on TAM. Trickier to assess!

PRACTICAL TAM (1st PASS OF CHAT)

Estimates vary by how you define the market (pure workforce-credentialing vs. compliance software vs. whole RegTech market). authoritative market research firms provide different figures; below I list a clean, sourced range and how to interpret it:

1) Workforce / workforce-compliance software (narrow segment) — one specialist estimate puts the global Workforce Compliance Management Software market at ~US$2.4–2.5 billion (2024) with double-digit growth (CAGR ~12%+). This is the most directly comparable segment to Kinatico’s product. Dataintelo

2) Compliance management software (wider category) — multiple sources show a broader Compliance Software market in the tens of billions (USD) range: e.g. Mordor / Verified Market Research / The Business Research Company report values spanning ~US$33–60 billion depending on the exact scope and year. These figures cover GRC, regulatory reporting, policy management and other enterprise compliance functions — larger than Kinatico’s immediate niche but addressable over time if the company expands features.

3) RegTech (largest umbrella) — RegTech market estimates commonly range from ~US$17B (2023) up to >US$70B by 2030 depending on the research house and definitions (RegTech includes identity, KYC/AML, regulatory reporting, compliance automation). If Kinatico expands into adjacent RegTech services (identity verification, screening, automated regulatory checks), it could target a slice of that broader RegTech TAM. 

Bottom line (practical TAM for Kinatico right now):

• If you map Kinatico to the workforce compliance / credentialing sub-segment, a defensible global TAM today is in the low single-digit billions USD (~US$2–4B) and growing at double-digit CAGR.
• Kinatico is a SaaS RegTech / workforce-compliance vendor with measurable scale in ANZ (claimed ~1M people, 30k organisations). That makes its immediate market the workforce compliance niche (smaller TAM but faster path to revenue). 
• The company faces competition from both specialist credentialing vendors (CredEntry, Cited-style platforms, Rapid Global) and broader compliance/GRC or HRIS vendors. Competitive differentiation will come from domain expertise, integrations, scale, verification capabilities and vertical focus (healthcare, mining, aged care, construction etc.)

If you stretch to all compliance software / RegTech opportunities (adjacent services, vertical expansion), the addressable market expands to tens of billions USD over the next 5–10 years. (Use the larger RegTech / compliance software reports for strategic upside.) 

CHAT’S GDP-BASED METHOLODLOGY TO CALCULATE KYP’s ANZ TAM (2nd PASS)

Including this for completeness and a data point - can’t say I am bought into it as I expect TAM’s to be a bit more specific, generally

Data Points

Global workforce compliance management software market (narrow segment): US$2.47 billion (2024), projected high double-digit growth (DataIntelo market estimate). Dataintelo

Australia GDP (2023) ≈ US$1.728 trillion. Macrotrends

New Zealand GDP (2024) ≈ US$260.2 billion. Trading Economics

World GDP (2023) ~ US$100 trillion (used to compute country share). Macrotrends

Baseline Approach (Proportional to GDP)

A simple, commonly used, way to estimate a country/region slice of a global software market is to allocate by economic size (GDP), adjusted for adoption intensity. Using that:

Australia + NZ combined GDP ≈ 1.728T + 0.260T = ~US$1.99 trillion. Macrotrends+1

Share of world GDP ≈ 1.99T / 100T ≈ 1.99%. Macrotrends

Apply that share to the global workforce compliance market (US$2.47B):

ANZ TAM ≈ US$2.47B × 1.99% ≈ US$49.1 million.

Result (baseline): ~US$49M for the specific workforce-compliance / credentialing software market in Australia + New Zealand today.

Adjusted Baseline

Higher per-capita digital adoption in ANZ: Australia and NZ are mature, high-tech adopters with strong regulatory compliance needs in mining/healthcare/construction, so per-GDP spend on RegTech could be above global average. Adjusting up (×1.5–2.5) gives an upper practical TAM of roughly US$75–125M. (This captures higher software penetration, industry concentration and local demand for workforce credentialing.)

Lower bound: if you instead use the broader compliance software market (tens of billions), and then narrow by the fraction that is workforce credentialing, the ANZ slice of that could be larger — but that drifts away from Kinatico’s immediate product set into adjacent markets. See VerifiedMarketResearch / Mordor for larger compliance market context. 

Final GDP-Based TAM

Conservative / baseline (GDP share): ~US$49M (approx). 

Practical / adoption-adjusted upper bound: ~US$75–125M (to reflect higher per-capita software spend and industry concentration in ANZ). 

KYP’S VIEW ON TAM FROM FEB 25 RESULTS PRESENTATION

• KYP’s $2.7b TAM aligns more closely with the Global Workforce/Workforce Compliance Software, but is a a fraction of the global RegTech TAM of US70b by 2030
• The Estimated Serviceable Market of $200-$300m within 10 years is on the higher side of the GDP-based TAM from Chat of US75m-US$125m
• Boils down to what the agreed definition of “RegTech” is, as may not be comparing like-for-like at all
• Agree with the SME’s positioning, which is taking on a more XRO-like focus

Customers / scale: Kinatico states it serves ~1 million individuals and >30,000 businesses across Australia & New Zealand (public investor content)

TAKEAWAYS

• Am not clear what makes up the KYP TAM as “RegTech Solutions” is very broad - KYP’s $2.7b TAM is more aligned to the narrower “Workforce compliance software” TAM (US24-25b) above vs Global RegTech (up to US$70b by 2030)
• Also unclear if the KYP TAM is global, semi-global (in the countries KYP is targeting only) or pure ANZ

QUESTIONS

Q5: What does the KYP TAM comprise off? Reg Tech (broader) or Workforce Compliance (narrower). Is that a global or ANZ only TAM, and the Serviceable Obtainable Market of ~60-70% of TAM is thus against the ANZ market only?

Have opened a position in Kinatico (KYP) - IRL and here. Another company converting from traditional software to SaaS. They do compliance software for workplaces - think certification checking when onboarding staff and ongoing monitoring. Eg mining drivers, aged care, etc. “RegTech” is a growing area with compliance requirements only getting more complex - their product integrates with most HR systems and handles this complexity for clients. Some nice enterprise clients and adding more as time goes by.

My theory is that they are at an inflection point and with moderate growth and a lower R&D / development bill in FY26 and ongoing they could start a much more profitable trajectory as the operating leverage starts to kick in.

Balance sheet is solid with $10m cash, positive cash flow and no debt. About $120m market cap and at current numbers a very high PE (just over $1m profit this year) but expecting that PE to drop to the 20s on FY26 results and more beyond.

I’ve not met management but the 3 key execs have good pedigree and skin in the game. I really like the chief revenue officer - seems to know his product very well (and gets more airtime than the CEO at briefings!)

In summary my thesis is:

• growing SaaS revenue into a market that is growing - they say TAM is $2.8b and growing
• pricing is ok if you look forward (and squint back :-)
• solid balance sheet
• Should get lots of leverage from growth and capex bill has peaked (at least CEO thinks so) - just turning NPAT profitable in FY25
• product is sticky and gaining in acceptance / child care is a interesting opportunity off the back of the inquiry also
• shares on issue have stabilised and even a little buyback last year - there’s no major dilutive options or like out there
• management have good pedigree and are well aligned

Downsides/question marks/risks:

• that money burns a hole in their pocket and they do something stupid like M&A
• management take increases - it’s been big as a %age of profits but my theory is it’s front ended and will fall as a percentage of earnings
• The big ERP players figure out reg tech and start doing it for themselves
• it’s scalable here but limited / costly if you go overseas
• liquidity of the stock isn’t ideal

Thats about it - would be interested in other straw folks views…@Strawman - would be great to get them on for a meeting too…

Rich

3Q 2022 quarterly cash receipts was $7.3m, up 102% on pcp but lower than the $8.3m in 2Q. Operating cash flow was 855k. Free cash flow was 21k. Cash increased slightly to $12.3m with no debt.

With cash receipts of over $21m in the 9months to date, CV1 is trading at less than 2x the EV to cash receipts which seems cheap to me.

CV check reported revenues of $6.9m in the March 22 quarter up 64% pcp. Year‐to‐date revenue to $19.7m, up 77% on pcp.

CV1 has been cash flow positive on an operational level since 1Q 21 and free cash flow positive 4Q21 and 2Q22.

Cash is a health 12.2m and the market cap is only $48m.

Not sure why company is trading at close to 52 week lows when the financial results seem to be improving.

CVCheck – best sales on record, Bright acquisition on schedule

Highlights

•  Strong trading conditions during February resulted in a new all-time record month of sales and the 12-month booked ARR
•  New wins and order strength from pre-existing customers are driving strong sales growth
•  March sales continue strong
•  Bright People Technologies acquisition on schedule to close in April

Disc: I hold