Link copied to
So confident were its clients in the prospects of newly listed Aussie fintech enterprise HALO Technologies, a large proportion decided to take a stake in the company.
The uptake from existing software users on its $36.14 million IPO raise was big vote of confidence for HALO (ASX:HAL), a profitable global online equities and trading platform with a large proportion of high-net wealth users and international growth ambitions.
The raise exceeded the company’s target of $35 million, and prioritised existing HALO clients – those who are already familiar with the value proposition of the company’s investment software.
“Significant uptake in our IPO raise by our existing user base was a big vote of confidence for us, demonstrating faith from our users in the long-term scale up potential of our product and its appeal in markets domestic and abroad,” HALO CEO George Paxton said.
But what does HALO’s product do?
Created by founders with more than 20 years’ experience in institutional fund management, HALO is a software solution developed on a research-first philosophy – institutional investor level analysis for the retail user – split into two distinct but integrated service offerings, Global and Trading.
Its HALO Global subscription service offers its clients sophisticated stock analysis across local and international markets – think institutional level analysis for established, high net-worth retail investment. The HALO Trading service offers users ready-made, themed investment portfolios ideal for low-touch and values-based investment and self-managed super funds.
HALO also offers competitively priced online brokerage.
“Halo Global provides an array of tools for investors seeking to discover and research global investment ideas, manage their portfolios and access market analysis, and offers built-in trade execution capability,” Paxton said.
“We believe it’s an essential tool for the self-directed investor and a must-have for financial advisors in Australia and overseas.”
The growth in Australian client numbers would suggest HALO users agree.
“HALO has a demonstrated track record of revenue growth, with a compound annual growth rate of 173% in pro forma revenue from FY2019 to FY2021,” Paxton said.
“HALO Global grew its subscriber base with a CAGR of 115% from 2019 to 2021.”
The company’s clients, typically aged 50+ and boasting high net worth, had more than $245 million invested in the world’s leading markets through its Macrovue Omnibus Account Management System on December 31, 2021, with 3811 subscribers to the service and a further 3843 clients using its trading interfaces.
Macrovue began life as part of the AMP incubator program and was acquired by HALO in May 2019.
“Following the acquisition of the Macrovue global equities trading solution in May 2019, HALO Trading has grown revenues from $0.211m in 2019 to $5.848m in 2022,” Paxton said.
“This acquisition is a good example of management’s ability to find undervalued assets in conjunction with a first-class technology team.”
Revenue is generated through subscription sales, brokerage fees and management fees to HALO’s B2C and B2B client base.
Building momentum abroad
The company’s IPO coincides with its strategy to expand globally across the business-to-business and business-to-consumer markets – with eyes on the US and UK.
The capital raised will be used by management to grow the company’s direct and third-party distribution channels through partnerships and deals, as well as funding the acquisition of complementary businesses in Australia and overseas.
The acquisition model allows HALO to rapidly scale up its user base without the need to invest significantly in its sales force. Groundwork has already commenced, with assessments being undertaken of the landscape completed in both North America and the UK.
The anticipated growth model coincides with an increased global investor appetite for values-based investing.
HALO Trading’s Vues feature allows its clients to invest directly in the best global companies and trends through customisable thematic share portfolios, and also offers research-based, expertly selected portfolios with built-in tax reporting tools.
Unlike exchange-traded or managed funds, the client is the beneficial owner of the shares.
“HALO Trading’s thematic investment portfolios provide a high level of transparency and control for investors who want to combine the ease of ready-made portfolios with the certainty that the activities of the companies they hold fit with their personal values and interests,” Paxton said.
As ESG themes take hold in investment communities around the world, it’s a sweet spot in which to operate – and a competitive advantage on which to grow.
This article was developed in collaboration with Halo Technologies, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.