Cloud travel management company Serko to IPO

Summary:SaaS online travel and expense management software developer announces it will list on the New Zealand Stock Exchange.

Online travel and expense management software company Serko will float on the main board of the New Zealand Stock Exchange, aiming to raise at least NZ$17 million and up to NZ$22 million.

The target listing date is 24 June with the offer closing on the 19th. Up to a third of the company's shares will be on offer.

Revenue of around NZ$11 million is expected for 2015, up from NZ$6.7 million in 2014, delivering an EBITDA loss of NZ$5.5 million. Serko chairman Simon Botherway said by the end of March 2016 the company was expected to be at break even.

Grafton and Botherway said being profitable now would result in lost opportunities.

Listing documents had been filed with regulator the Financial Markets Authority this morning, Botherway said.

It's been a long awaited offering. Serko owners Bob Shaw and Darrin Grafton, also the company's CEO, hinted a year ago they were considering selling 25 percent of the company in a public offering aiming to raise $20 million.

Grafton
Darrin Grafton

Grafton said travel agencies act as Serko's reseller channel across the region. Serko does not disintermediate such travel providers, rather it promises to boost their productivity and sales.

Botherway said 90% of the company's revenue comes from Australia with the Federal government and state governments featuring as major clients. Serko said that is around 20% of the addressable market there.

In total, around US$3 billion will be booked on Serko's platform this year.

The company has been bolstering its management team for some months ahead of the IPO, including the appointment of Botherway and former Endace strategist Tim Nichols as chief product officer.

Serko, founded in 1994, claims to be Australasia’s leading online corporate travel booking and expense management company.

Serko employs more than 100 people across the Asia Pacific region and says it is growing both domestically and in emerging markets such as India, China, the Middle East and Singapore.

The company's products, Serko Online and Serko Incharge, are cloud-based aids to help organisations reduce the cost of corporate travel and the approval and reconciliation of travel expenditure.

Botherway said the enterprise level SaaS products were highly disruptive and put control of travel spending back into the hands of CFOs, in part by embedding and enforcing corporate travel policies.

Serko Online integrates with the main Global Distribution Systems (GDSs), allowing users to search content stored there. However, it also talks to other travel providers such as low-cost carriers and discount accommodation providers.

He said the capital raised would be used for Asian expansion. A new smartphone application will be launched in the second half of 2014.

As well as new geographic markets, Serko is looking at spaces adjecent to its existing enterprise market in small and medium sized businesses, Grafton said.

After a series of ownership changes, Serko has been owned by Grafton and business partner Robert Shaw since 2007.

Topics: Cloud, E-Commerce, Enterprise Software, New Zealand

About

Rob O'Neill is a writer for CBS Interactive based in Auckland, New Zealand covering business and enterprise technology for ZDNet. He has previously worked for IDG, The Sydney Morning Herald and Melbourne's The Age as well as various business titles, most recently editing the Business Sunday section of New Zealand's weekly national news... Full Bio

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