How to invest in the emerging field of ‘geospatial analytics’
How are the players in the ASX different?
There are three main players in the geospatial analysis space on the ASX:
Nearmap (ASX:NEA) were the first to come on board and fly planes to survey a particular area for clients. They upload that information and then make it available to corporate customers and consumers but there is a significant cost to capture.
Spookfish (ASX: SFI) has expanded on that with aerial data sourced from the planes of their US partner to provide a variety of maps. At this stage they deal mostly with the view from above, but the costs of flying their own planes is significant.
Pointerra (ASX:3DP) is different again because it is a platform to store, manage and access 3D laser imaging data that makes it easier to manage and render 3D point clouds – there is no one out there doing the same thing. Rather than collecting it themselves like other players, 3DP holds it in the cloud for others to use. They refer to themselves as being the “getty images” of 3D data by taking something that is cumbersome and making it easy to access.
Is there enough demand for all three to succeed in their commercialisation phase?
The feedback from industry is telling us that there are a whole bunch of other players that will be interested in some level of geospatial analysis – whether that is the companies that provide hardware for laser scanning or the agencies and software companies who are using the data themselves.
The difference is in the model by which each company generates its revenues and how much they will burn through in operations. 3DP’s model is very collaborative rather than competitive and the company has a very low cash burn compared to other tech companies that are in the early stages of monetisation. Are retail investors apprehensive to invest in tech stocks if they don’t fully understand how it works?
Your average investor needs to start with research on what is happening on the market but it can be a challenge for tech companies because people are more likely to stick with the stocks they know like resources or banks.
They are looking for familiarity and a way that they can relate to stocks – in this space we refer to Pointerra as being a part of the typical cloud model that uses subscription services. While many investors may not be familiar with the survey aspect or 3D imaging, the broader concept makes it easier to digest.
