I don’t think they are buying companies out of desperation, or...

I don’t think they are buying companies out of desperation, or due to the inability to grow organically, or scale and become profitable.

Remember Family Zone entered the US market only a few years ago and is now on course in a short timeframe to have 1 in 5 US schools (20%) using their platform and services.

I will say the price they are raising at is a little unfortunate for shareholders driven largely by money going out of the sector, although I think it’s quite obvious the timing of their moves is driven largely by ambition, and undeniable momentum. FZO is trying to win a race in an industry that is evolving largely because of a trend of consolidation they have been pioneers in establishing. The stakes are high but you have to respect their commitment to double down and let their vision become a reality.

In both the Smoothwall and Qustodio aquisition; there was a common theme: both companies were very selective in choosing Family Zone as their parent company. If you watched the most recent webinar, it was explained that the Qustodio founder who called Tim Levy and basically requested that they buy them out. Smoothwall was also selective where it was reported that the transaction was not just driven by the figures being offered as they had many bidders including some well established profitable companies. Rather they prioritised creating a partnership based on shared vision, strategy and values. Smoothwall prioritised the vision and track record of Family Zone which has been evidenced in the way they have quickly penetrated a competitive US market.

It’s obvious this company has the ability to scale and become quite profitable at any point they wish; their service margins are currently at about 80%. They’ve made it clear in the past it’s not their aim in the short/medium term. They seem to not be making compiromises on their vision and its aggressive execution; and as investor I have to respect that. I’ve spent some time looking at who they hiring on LinkedIn; and it’s obvious they are investing heavily in talent, and creating ambitious positions which reflect a company trying to establish a global footprint and revolutionise the industry.

I have been following this company for many years now; and it’s fair to say they made some mistakes in the past as they had a trail and error approach and burnt some cash trying to refine their strategy; although it’s all coming together now. I am certain Investors will see this in their upcoming results, which will evidence a sustainable and fast growing company. The June quarter will show some impressive results and I think will calm many investors down who currently have a ‘show me the money’ mentality.