20th May, 2022
22nd June, 2022
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
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Global internet heavyweights are phasing out their third-party cookie-based marketing – a bold move that XPON Technologies believes holds the key to the industry’s future.
Listed on the ASX in December 2021, Australian marketing technology (martech) business and Google partner XPON Technologies (ASX: XPN) provides digitally led, AI-powered marketing solutions to its growing list of global clients.
Benjamin Harrison, chief investment officer at Altor Capital, featured XPON as a stock from one of his favourite industries on our Meet the Fund Manager session in May.
“The reason we like marketing technology as a thematic is that there’s a data privacy concern as e-commerce and the internet is expanding globally,” he said.
Tech giants Google (also known as Alphabet) and Apple command a combined 84% market share of the world’s internet traffic via their internet browsers Chrome and Safari.
Altor has an equity investment in XPON supported by a thesis that the impending removal of third-party cookies from the internet ecosystem is a significant driver for the business’s value.
“There’s a big macro that’s driving the use of this technology platform,” Mr Harrison said. “Analysing indigenous company data is expected to become critical to deliver effective, targeted and relevant marketing campaigns.”
XPON Technologies CEO Matt Forman joined us on our Meet the CEOs event, echoing Mr Harrison’s views, saying: “We have a hypothesis that as the economy contracts, data becomes more valuable as organisations need to use their data more effectively.”
Mr Forman highlighted XPON’s capability to capitalise on industry tailwinds such as governments introducing regulations around privacy and big tech tidying up how they make consumer information accessible and available throughout their ecosystem.
However, in a recent earnings report, Facebook (also known as Meta) mentioned that the phasing out from Apple would cost them roughly $10 billion a year in lost advertising revenue.
Sharing the same plight are companies who spend significant monies on advertising or delivering customer experiences through digital channels or digital products.
“The solution is using first-party data which is owned by a company on its customers,” Mr Forman said.
“As long as it’s used in the right security and privacy context, it can be used to power more relevant and personalised advertising and customer experiences.”
XPON’s intellectual property, a customer data platform called Wondaris, allows clients to analyse first-party data using machine learning and AI and predict customer behaviour.
“Essentially, it’s a SaaS product that lives in the cloud and clients can plug their data into. It enriches that data and allows clients to use that data in a privacy compliant way.”
XPON’s partnership with Google Marketing Platform accounts for 30% of the former’s distribution. The latter’s parent company, Alphabet, is also expected to phase out its third-party cookies in CY23.
With a board that includes the likes of Tim Ebbeck, former CEO of Oracle and SAP for Australia and New Zealand, and holds significant skin-in-the-game, Mr Forman believes XPON is well-placed to achieve its goals in an addressable market valued at $201 billion in 2025.
As Q3 FY22, XPON was sitting on $11.1 million in cash, with annual recurring revenue increased 183% to $14.5 million and Q3 revenues increased 133% to $3.4 million in the previous corresponding period.
“We have plenty of cash in the bank to keep executing on our growth strategy and the board believes that now is the time to be acquiring customers, with a line of sight on when that will translate into profitability,” Mr Forman said.
Click here to view more videos from Benjamin Harrison’s The Insider: Meet the Fund Manager session, or click here to view the full The Insider: Meet the CEOs session.
Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position. Any advice contained within this presentation is general advice and does not consider your personal circumstances, you should consider whether it is appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.
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The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.