Beep, beep! Listed Kiwi tech EROAD maps out ASX debut

Xero, the a2 Milk Company... EROAD?

Kiwi tech play EROAD is putting its name in front of Australian fund managers, hoping it can be the latest NZX story to make it big on the ASX boards.

It is understood EROAD - with the help of Bell Potter Securities and Canaccord Genuity - is preparing to put a $NZ25 million ($23 million) proposed share placement to Australian funds, which would coincide with the ASX listing and a potential selldown from existing Kiwi investors to try to boost liquidity.

EROAD is a transportation and logistics industry tech business, whose tracking software is used to manage vehicle fleets, support regulatory compliance, improve driver safety and reduce the cost of operating a fleet of vehicle or other assets.

The company reported revenue up 32 per cent to $NZ81.2 million in the year to March 31, a 33 per cent EBITDA margin and a $NZ1.4 million profit.

Its growth pitch to investors is about conquering the North American and Australian markets, having established over the past decade or so that its product is well used and liked in New Zealand. It told potential investors it had achieved 100,000 connected vehicles in its first nine years, and its next target was 250,000.

The growth story is intact, according to the mooted pitch, with investors to be told the company expected its upcoming half-year result to reveal $NZ43.5 million to $NZ44.5 million revenue and up to $NZ14.2 million EBITDA.

It said revenue growth was driven by an increase in total contracted units from new and existing customers, and its ability to squeeze more out of existing customers.

It is understood EROAD plans to raise $NZ25 million in a placement and another $NZ5 million in a share purchase plan to support its "growth aspirations". Funds raised would be used to invest in its platform via product development and marketing.

EROAD's NZX listed shares closed at $NZ4.35 on Monday to value the business at $NZ292.9 million.