SRO Headed for strong growth

ShareRoot Limited (SRO) Tapping into the very high growth of digital marketing spend

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 Recently listed ShareRoot (SRO) has developed and launched on online platform for companies and brands to easily integrate User Generated Content into their digital marketing campaigns.

 Through SRO’s SaaS-based platform, customers (brands and marketing agencies) can obtain the legal rights to content (e.g. photos) the everyday consumer posts on Facebook, Twitter and Instagram, and use this content to promote their products through digital marketing and on websites.

 Tapping into the very high growth of social network advertising in the medium to longer term (18% CAGR in the US through 2019) to more than US$17BN annually will be a major share price catalyst for SRO, in our view. Single platform to find, secure, publish and measure UGC marketing

 SRO’s platform helps customers find so-called User Generated Content (UGC) on the internet, based on key words in hashtags used in social media postings or based on the location of the poster. Customers can subsequently reach out to posters and ask for the legal rights to use the content for commercial purposes. The latter has been a key issue for companies as the recent lawsuits around alleged copyright infringement by Lorna Jane and Virgin Australia illustrate.

 Once the use rights are legally secured, customers can manage and publish content through SRO’s platform, e.g. for use in digital marketing campaigns and on their websites. Finally, customers can quantify and measure effectiveness of specific content sourced and published through the platform. Straightforward SaaS revenue model; high-profile clients signed

 SRO currently has two different packages on offer at a cost of US$350 and US$1,250 per brand per month. Packages with more functionality for larger enterprises of US$4,000 and US$10,000 per month will become available in June 2016 and January 2017 respectively. Paying customers include a number of McDonald’s franchisees, Costco, UCLA, Coleman, and ConAgra Foods.

 SRO operates a land-and-expand strategy, signing new customers at discounted rates, driving use of the platform, adding significant value for customers, allowing SRO to derive more value from customers later on by moving them to more elaborate and expensive packages. Valuation and Recommendation

Applying this multiple to our projected FY17 revenue of US$4.5M, values SRO at A$0.10 per share. We start our research coverage of SRO with a Speculative Buy rating and price target of A$0.10 / share.


Link to news articles as per below:

bandt.com.au - Secret Life of Pets Competition Immortalises An Aussie Pet On The Silver Screen
news.com.au - ShareRoot powers movie campaign
bandt.com.au - Universal Pictures Gives One Aussie Pet The Chance To Be Animated
adnews.com - Seven, Universal Pictures leverage UGC to promote new film
adnews.com - ShareRoot Signs First Australian Client
The Australian - ShareRoot Gets First Asia-Pacific Client
adnews.com.au - Visual marketing startup eyes Aussie expansion
martechadvisor.com - ShareRoot Integrates with Hootsuite to Deliver its User-Generated Content within the Social Media Marketing Tool
*.com.au - Shareroot signs new clients to social marketing platform
forbes.com - How To Get Creative With Your Startup Fundraising Approach
businessnews.com.au - Stoped Presses Go On Mining Website
theaustralian.com.au - US Startups Head Down Under in Search of Capital
The Wall Street Journal - US Tech Startups Head to Australia for IPOs
copyright link - ShareRoot Takes Silicon Alley to ASX
Vator - Meet ShareRoot, a Platform to Connect Users with Brands
fnarena.com - Hot New Potential in Tech Sector
crn.com.au - McDonald's Hungry for ASX Bound Marketing Automation Firm
theaustralian.com.au - Tortuous Route to True Love for Kindred Souls