Morgans Conversations: Sam Riley, co-founder and CEO of Ansarada

• Ansarada's SaaS information governance positioning.
• Its ASX listing following the merger.

A market-facing overview of Ansarada as a public company.

The Morgans Conversations I'm joined by Sam Riley, CEO and co-founder of ASX-listed Ansarata.

Sam goes into the story and the background of Ansarata and the product suite that they've developed over many years, the geographies that they play in and certainly some of the examples of the deals that the Ansarata platform is used for.

We join Sam now as he goes into detail about the history of the company and the progress that they've made thus far.

Yeah, it was a really interesting way Ansarata got started.

So first of all, the name Ansarata is an anagram of the four founders.

So you have Andrew, Sam, Rachel, and Daphne.

So the four of us did get together, and I remember coming up with that name and Googling it to make sure it wasn't dead grandmother in Spanish or something.

So obviously, you need a name.

But how it came about is Andrew was the chief technologist , a technology officer developed a product, a business that was getting sold.

And this was online hotel bookings.

Back in 2005, the business got sold, called hotelclub.

com or Flareview Travel was the entity.

And Daphne was the financial controller there.

And Rachel, who's also my sister, she was working for KPMG, helping the business prepare for sale and also execute the sale.

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So she was in transaction services.

So it got to the stage where they were going to sell the business and they said, hey, two or three of the interested parties are in America and they're going to need to do due diligence.

They're going to have to look at all the financials and HR and contracts and more.

And, you know, they can fly over and do that in person, like physically, which will cost a lot of , or they can do it online.

Because there's a new product called a virtual data room designed to help people do this.

So Andrew looked at the current virtual data rooms that were available then, and he didn't like them from a technical perspective.

He thought they're very clunky, pretty slow, and he didn't help them in high regard technically.

And then Daphne and Rachel being accountants, they thought they were expensive.

that got used to facilitate that sale and the due diligence around it.

And then they were talking amongst each other and they go, listen, we've got a Russian software engineer and two accountants.

There could be a business here because, you know, people seem like they're busy.

They're running their business, trying to sell it.

The advisors are worried about risk and getting the deal done.

Everyone's trying to work at a million miles an hour.

So there's a big opportunity for technology.

to speed that up, help people reduce risk and provide insights to make decisions and things like that.

So after they validated and got excited about the potential, Rachel called me up because my background is more highly entrepreneurial from day dot and into marketing, strategy, sales.

So we teamed up together and that's how it got started.

And first year, we didn't raise any money.

We only put in $30,000 of our own money.

and we just went around to all the people we knew that we would have to create value for.

So we had a list of bankers and accountants, CFOs, general councils, and we diagnosed what are the outcomes they want, what are their current stresses, how do they do things today, and then we would come up with a better way of doing it and design that in the product, and then we'd go back and showcase that to them, and they'd say, guys, , that looks great, but I don't always want that feature.

Can you make that an on-off control because I want to be able to switch it off for some deals?

So after about a year of all this stuff, we got to the point where we'd actually established a lot of trust with people because they'd seen us listen to them and build things that they wanted.

And then a few of those advisors said, hey, I've got a small property deal coming up where we're selling a building.

Do you guys want to run it?

And things like that were capital raising.

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space we operate in, like billions of dollars in deals.

But it's very high risk.

It's high value and high risk for people doing them.

So we wanted to make sure that our brands and our products and experience was absolutely bulletproof for what was needed.

And what we learned back then was still what drives us today.

People want to get great outcomes and they want it to be simple.

And simplicity was a hormone.

from day one, simple experience, simple UI, simple everything.

And the other one is risk.

People don't want to take risk.

You know, they don't want to be exposed.

So, you know, security, safety, and baking that into our product and service was key from day one as well.

And Sam, I'm interested to know on that, I suppose, product-led, customer-led, I mean, that sort of battle on innovation front, like are you getting a lot of feedback and we've got millions and millions of data points.

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The same customers that we served years ago are the same ones we serve now.

So actually our intimacy around understanding the jobs they can do and how they do them and what are their emotional drivers and irrational drivers of their behavior.

We've got such a wealth of that that we actually, probably about five years ago, we decided, look, we've got a good amount of customers that we can meet with and they can , express something and we can build a feature for them and it's going to add some value.

But if we really want to address the root cause of their problems or helping in a bigger way, we're going to have to tap into some of the patterns in the data and we're going to have to address some of where this stuff goes off the rails early.

Because you've got to remember, we started off optimising around the due diligence phase of the deal.

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and simultaneously what's been happening in the world is the trends so there's a lot of trends around increasing compliance and governance and risk and we read about ESG and there's another big trend no one would disagree with around information is growing in size and complexity so what we look at is okay how do we help people address these risks and stay compliant and deal with the ever-increasing volume of information and succeed in their most critical outcomes, which is a deal.

And that's where it led us to create not just features, but whole new products and applications that complement the base technology we established years and years ago.

So, you know, we can help someone diagnose their current state of their business.

and identify gaps and then also implement a solution that will just help them improve operationally today and simultaneously better in the deal for tomorrow.

And can you talk about your mixture of clients and the deals that they are doing from start to finish?

I'd imagine it's not just about a deal but there's, as you mentioned, some tender processes and biddings that happen beforehand which may use , your platform, and then, you know, we've seen a buoyant IPO market.

I mean, there's listings, primary listings, and capital raisings, et cetera.

I mean, where do you fit in amongst your products?

Is it mainly private, mainly public, and I suppose your geographical exposure?

Yeah, well, the short answer is we serve all of those public and private, anyone from a startup that's wanting to do a really professional, quick job on .

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And then afterwards, there's an integration aspect as well for every deal.

So that's one example.

You've got ASX companies that are preparing for IPO.

So if you go on the ASX website, we've actually got some resources on there where people can use their product before they even think about doing an IPO just to evaluate what they have, what they don't, and identify some gaps, estimate the amount of effort and time to do it, and actually then collaborate with the and their team to chip away at getting that in-state.

And the whole IPO process can be facilitated on the platform.

And then the other part of what we do is we're the backbone of information for a lot of tendering and infrastructure development.

So if you look at in Sydney, you've got the West Connects project or Sydney Metro, Sydney Light Rail, all of these things, platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform platform and they need that in legal grade technology.

So, you know, that's what our product does.

Facilitates the flow of information from various parties to achieve a great outcome, but in a very controlled environment.

You know, it's not an open do-what-you-want collaborative environment.

There's processes and structures that people because they're healthy and our product helps facilitate them really quick.

And I'd imagine, Sam, as there are more deals and more data points within your suite of products, that if I was to tender for something, then I started using your product because I'd never heard of it, but that's what the process is using, then maybe I become a customer later on?

Yeah, exactly.

So that's been a lot of how we've .

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They have to use the product because the sellers invited them in.

But then they see some of the functionality around sharing information, securing it, tracking it, and then some of the collaborative stuff around Q&A or managing it as a process with tasks and project management type tools.

And then that leads us to expand with them.

The other expansion comes from particularly people has to raise some capital, but then they say, oh, actually, I can run my audit on here.

Because an audit is really a defined standard around things that you need to have and verify, and people have to own them and gather them, and then there's a review and verification process, or in this case, the auditor.

And they can see our product does that.

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So they'll expand into that use case.

And over the last six months, as you know, we've acquired a board product.

So now, a key part of what we're doing is saying, hey, you know all the stuff you learned with Ansarata, you can now use us to operate your board meetings and board management and committees and subcommittees.

So our strategy there is twofold.

We have the same churn and return.

Basically, if you look at our customer base, over many years, you'd have a customer do a deal, but then they'd sort of churn off the platform because they didn't have another deal.

But two years later or one year or three years later, when they had another deal, they'd come back.

So we didn't really lose them as the customer.

We lost them as a use case.

And that's why over the years, we've added in more features and products so that, yes, you might not have another deal use case for a few years, but you do run your board every month.

that you want to have visibility and control over and you want to have confidence that's being done right, you do audits.

So that's our whole strategy there is expanding customers across into other products and utilising our user base to do that.

And Sam, more recently you've become a public company.

Can you talk about that process and the why and the how and how you've found life differently?

, I suppose, in some stages from being a private enterprise, named after some friends and family, and now the name's everywhere on the public markets?

Yeah, it's been a really interesting experience.

Firstly, we had to do an IPO, but we did a merger and sort of a reverse takeover slash IPO process.

There was a lot of complexity involved.

in getting that done.

So of course it was great to use our product again on ourselves.

So that was really interesting and it actually gave me a lot more respect and understanding for the work that advisors do and I think some of the regulators that are architecting the listing process, they go too far on this and that.

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.

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I read a book once called The Art of Explanation, and it's about the guy who started those whole 90-second explainer videos that you see everywhere.

And when you know your own company and product really well, and my customers know what we do, I don't really have to explain things at a basic level for them.

He uses the alphabet as an analogy.

He goes, look, he could be like a letter Z or the letter W, in terms of your competency.

And when you're explaining something, you think that you're going back to ABCs, but you're probably going back to an L or an M.

Like, you're not, you know, so when we became public, and we're still trying to get better at this, by the way, Chris, so this is why this podcast is good, and I appreciate any feedback from the listeners on how we can do a better job.

It's how do we truly educate a mum and dad about what Anne Serrata does it and how valuable it is.

And what's the easiest way we can explain that?

Like, is there better analogies and metaphors and stories we can use?

And that's something I've found different and something we need to do really well.

Another thing I've found is the increased discipline on some of the reporting.

Like, not getting the numbers right, the numbers that answer out have always been right.

from day one.

But, you know, just the meticulous nature of reporting to make sure that what's getting disclosed to everyone, or even if I'm having a call with a fund manager, that that fund manager isn't getting any additional information that a mum and dad wouldn't have, right?

Because that way, they would be able to act for it.

So I think the disclosure and the disciplines and the meticulous nature of is running a public company has a very good purpose behind it but of course it adds an overhead that when you're private you wouldn't have to spend as much time and detail on making sure you're doing that stuff really, really well.

There are a few experiences I've had and the other positive ones have been the recognition we get, people want to be a part of a public company, it helps us establish more trust and credibility in our space and that's been great and also just giving people you know we've been operating for many years before so the fact there's a liquidity available for people and you know we're going great and we're making money and growing so we might want to turn on their further charges right and raise some more capital and being public that makes that easy .

Yeah, I'd imagine it would be a little bit tricky as a CEO in a growth business, particularly during the turbulence that we saw last year where things are happening on a month-by-month basis but reporting on a quarterly basis or putting information out to the market.

Then next week, coronavirus happens or COVID-19 and things rapidly change and the world doesn't really know where it's going.

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One final question, I suppose, talking about last year and then bringing forward what has happened with deal flow and M&A is probably somewhat unexpected and there's been a lot of things that have been unexpected with regards to where the world was positioned last March to where it is now.

But can you talk about where you fit in, how you navigated through last year and the market opportunities at hand?

Yeah, it's a good question and it's easy for me to use it to frame up the of what we do.

But I'll talk about what that environment you just articulated created.

So that created a need to make decisions.

Like, what do we do?

Like, which numbers in our business are at risk and what's going to go up and down?

You know, what's plan A, plan B, plan C?

And any time you're thinking like that, you're going to want to get more than your own opinion, right?

So you've got your leadership team and you've got your , but you've also got advisors that are legal, accounting, banking.

And you want to get the smartest people in the room to look at the challenges and opportunities and then decide how are we going to act.

And the environment you described, that wasn't just a one-time gathering of those people and information to then make decisions.

It was happening very frequently.

that went up as well.

So instead of like quarterly or annually doing such an intensive, what otherwise you'd probably do in a strategic review exercise, companies were doing that almost weekly, if not monthly.

So that cascaded down to like finance teams and operational teams and legal teams having been forced to gather the right information in the right way.

so that people could analyze it and make decisions.

And that's the process I just described is called information governance.

So COVID for us as a brand was very good to get people to realize, hey, if we don't govern our information really well, it takes too long to get it.

We find out surprises that have been sitting there for years that we should have been dealing with.

And actually, when we do do it properly, we get better.

, we sleep better at night.

And when a situation arises, we can move really fast.

So we can, you know, go and refinance something or we can sell an asset or, you know, we can go and do a risk assessment really fast.

And, you know, we can do that even cheaper because we can involve advisors with less time and money spent on gathering information versus using it.

But the other thing I'd add is the people side, right?

people and culture and how do we look after our people and as an entrepreneur you think how can we do all three like how can we remove the risk look after our people and look at this whole situation as an opportunity and then you put those questions out there and people come up with some good ideas and good answers and I think everyone's been surprised in the world just how much opportunity has created for some companies and I don't think anyone would have forecast some of the success stories versus horror stories that we're now seeing almost a year later.

Absolutely, I agree with that 100% and some of the technology companies that I've been speaking to through that period which were predominantly cloud first or e-com first or didn't have the physical sites and lots of people that they had to sort of scramble to get on to the and migrate work from home.

But a lot of other companies seemed like it was a seamless process for them because they've had it for years.

So it was quite an interesting diversion on who thrived through it, I suppose, and who was sort of struggling to keep up.

Yeah, I've got a theory where, like, innovation comes from three sources.

You've got inspiration, frustration, and desperation.

And, you know, in good times, like every leader in every company, , and he wants to be innovating out of inspiration.

People are inspired to add more value and inspired to do great things, and they innovate as a result, and they create things that add value.

But he tells us, and COVID just proved this again, wartime proves it as well, is the greatest innovation comes out of desperation.

When people are in a situation where you have to do it or the consequences are catastrophic, , that fuels far more innovation, right?

So it also creates a lot of stress, so it's not sustainable.

So the reason it does, though, is it creates a sense of urgency.

So I guess what I'm taking away from it as a leader is like, okay, you don't want your people stressed and subject to do it or die at moments out of desperation innovating, but how can you create a sense of urgency and inspire people?

at the same time and have that driving innovation.

And that's something that, you know, we're constantly working on making better.

Sam, thanks so much for having a chat today about the history of Ansarata and the name, which I didn't know anything about, and the story and progress thus far through the way that you've been able to evolve the business and build out different modules along the way due to customer-led demand and the story thus far in what is a rapidly large or growing market, but it's certainly a very, very large market on a global scale.

So thank you very much.

Yeah, thank you, Chris.

And just a reminder, if anyone's got any good ideas for us to count on or explain our story or just reach out, investors at anserata.

com, and we'd be happy to speak to you.

Thanks for having us, Chris.