Ansarada's CFO on growth, diversification and a $100M ARR target

• Ansarada is 17 years old, founder-led, and operates in over 180 countries.
• FY23 revenue grew 7% to A$51.5M and ARR grew 42%, despite M&A volume falling 30%.
• It is diversifying beyond the data room into GRC, procurement and sustainability.
• Cash flow positive and self-funding, targeting A$100M in ARR.
• Number one market share in Australia and New Zealand, strong in Benelux and South Africa.

It is rare to get a data room vendor's numbers laid out plainly, so an investor interview with the CFO is a useful window. James Drake, CFO of the ASX-listed Ansarada Group, sat down with Proactive to walk through a year that tested the whole category.

“When information and processes are structured correctly, organizations gain the insight and confidence required to achieve better outcomes.”

James Drake, CFO, Ansarada

Ansarada, he explains, is 17 years old and founder-led, built on the belief that when information and processes are structured correctly, organisations gain the insight and confidence to achieve better outcomes. In practice that means controlling critical information for advisers, corporates and governments, and securing how it is exchanged with third parties across deals, governance, risk and compliance.

“M&A volume in the first half of the year dropped 30% globally on average. We still grew 7% for the year.”

James Drake

The headline is resilience. Global M&A volume fell about 30% in the first half of the financial year, and Ansarada has historically tracked deal volume closely. Yet it still grew revenue 7% to A$51.5 million, and grew annual recurring revenue 42% year over year, by shifting customers onto longer-term ARR contracts through a freemium-to-subscription model.

“We grew our ARR 42% year over year, and we are targeting 100 million in ARR.”

James Drake

The other theme is breadth. Drake is candid that Ansarada is no longer a pure M&A data room. It now spans governance risk and compliance, sustainability reporting, board portals and a procurement business that helps governments tender multi-billion-dollar infrastructure projects, all while staying cash flow positive and self-funding its growth toward a A$100 million ARR target.

For a buyer, the signal matters as much as the figures. A vendor that is number one in its home market, diversified across products, and financially disciplined is a safer long-term bet for something as critical as a data room than one riding a single product and a single deal cycle.

A clear read on Ansarada's financial health and breadth, reassuring for buyers who want a stable, growing vendor that is more than a single-product data room.

Speaking with James Drake this afternoon from Ansirada.

James, good to see you.

You too.

Thanks for having me.

James, just give us a brief refresh firstly on Ansirada.

Tell us about the business.

Sure.

So Ansirada has been around for 17 years, founder-led.

And Ansirada believes that when information and processes are structured correctly, organizations gain insight and confidence required to achieve better outcomes.

That's our belief.

What that means is we really control critical information in the company for advisors, corporates, governments, and ensure that the exchange of information with third parties is controlled under high security and collaborative workflow tools and other products.

We have solutions across our deals platform, lots of transactions, M&A, debt restructuring, IPOs, all the way through to governance risk and compliance.

Look, you saw a strong end to full year 23.

run us through some of the key highlights from your fourth quarter.

Sure.

I think the way to think about the whole year and Q4 is that we all saw very uncertain and turbulent macroeconomic conditions.

Historically, Anso Rite has been pretty correlated with M&A volume.

M&A volume in the first half of the financial year last year dropped 30% globally on average.

We still grew 7% for the year.

We're able to grow for a couple of reasons.

One, we're developing longer term relationships with our customers through annual recurring revenue relationships.

And also we've diversified away from purely NMNA and transaction business to covering all sorts of other areas, like I said, sustainability products, government risk compliance, board portals.

And we have a very exciting business in our procurement.

which is helping governments tender projects, major multi-billion dollar infrastructure projects around the world.

Well, looking ahead, James, what are the plans in terms of growth?

Where are you looking?

Growth, yeah.

So as I said, last year, tough economic conditions, but we grew 7% top line.

That's our revenue ending at 51.

5 million for the year, Australian.

However, What's more exciting embedded in that number is that we grew our ARR 42% year over year.

And that's a key focus of ours as we look to transition more of our relationship with customers to those longer term ARR contracts.

And the way we do that is obviously by demonstrating value and ensuring that our SaaS products are simple, easy to access through a freemium acquisition strategy.

and then once becoming a subscriber ensuring they see the value and are retained.

And that's across all of our products.

So we saw growth in our ARR and our deals platform, our procurement platform, and also across GRC.

Where are the majority of your clients?

I mean, what are your main markets?

That's a good question.

We're actually in over 180 countries.

That's a lot to do with where deals are traded from.

As you can imagine, there might be a acquirers in the US, but the company might be in India.

So we're across the world in terms of our revenues.

We have 56% of our revenue coming from Australia, New Zealand, and the rest spread with a bit of concentration around UK, Europe, and the US.

So what are you working on currently, James?

What events can we expect to see from you over the next, say, six months?

Sure.

I mean, it's a little bit of a continuation of our existing strategy.

We are bringing more and more customers into our funnel through our freemium strategy.

And then we're really focusing on converting those into paying subscribers.

That's firstly how we're getting, and that's across all of our products, our customers into our funnel and getting that relationship started.

But the real focus is then, how do we ensure that we offer products and solutions that help them stay on the platform and solve their business needs?

And that's, indicated by our increase in ARR.

So it's really more customers converting into more ARR relationships and doing that with cash flow positivity.

We are running a CAC payback model that allows us to be cash flow positive throughout the acquisition and our investment in R&D.

So we've been cash flow positive the last three years, sorry, three quarters from a free cash flow basis, but also overall.

We expect to continue to do that as well.

So we're self-bunding our growth as we move towards setting up for our ultimate target, which we announced at our investor day back in March.

And I welcome people to check that out on our website.

But we are targeting 100 million in ARR.

And these are the building blocks, the deals platform, the GRC platform, sustainability products, which is obviously very hot in terms of demand at the moment.

We're rolling out and validating some of our solutions with our customers.

In a couple of words, James, what's the investment case here?

Why should investors look at an Ancerada?

We are a very well-known established brand in our core markets.

We're number one in terms of market share in Australia and New Zealand, and we're very strong in the Benelux region, South Africa and other places around the world.

So we have a very strong established brand.

with solutions are market leading, best in class with regards to our virtual data rooms, the deals platform.

So we're a known quantity and we've got a proven track record.

What's exciting and why people should be looking at us is on the back of that platform we're now expanding and diversifying our revenue stream into government's risk compliance products, sustainability products and also expanding further our procurement.

which if you look at the macro trends in terms of government infrastructure investment, the numbers are staggering in terms of the trillions of dollars that are needed to maintain and support the current infrastructure around the world.

So we're riding a pretty strong macro trend across all of our key products and we're doing it while maintaining good margins and metrics.

growing our ARR, which is key to some of our efficiency and doing all that with positive margins and cash flow.

Great to see you.

James, thanks for your time.

No problem.

Thank you.