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Companies with truly disruptive technologies make attractive investments.  Disruptive technologies center on innovations that disrupt traditional ways of operating.  Financial Technology (Fintech) disruptors have changed the way financial transactions of all types are conducted.  Software innovations are penetrating the Human Resources sector with the potential for disruption.
One of the earliest Human Resources Technology stocks to hit the ASX came from Silicon Valley in the US and exploded.  In the aftermath of its quick market darling status the company became the standard against which other potential tech disruptors were judged, as in would this company be the “next 1-Page.”  
1-Page began trading on the ASX in May of 2014 following a reverse merger with failed junior miner InterMet Resources.  Within three years the stock faded away, ceasing operations in May of 2017.  The price movement chart tells the story.

One of the company’s in early bidding for the title of the “next 1-Page” was another HR tech disruptor, Reffind Ltd (RFN).  Like 1-Page whose technology centered on talent recruitment, Reffind also focused on a niche in the broader world of HR-employee communication.  While not yet dead, the company’s stunning share price collapse suggests Reffind is at best on life support.  Here is the chart.

There are some newcomers in HR Tech on the ASX, with one of them clearly inheriting the role of new market darling, and there are more to come.
The frontrunner by a far is LiveHire Limited (LVH), listing on 10 June of 2016 with the share price moving steadily upward ever since with a few dips along the way.  Lagging far behind is Search Party Group Limited (SP1) which came on in August of 2016.  Here is a comparison chart for the two.

The most recent addition is Elmo Software Limited (ELO), listing on 29 June of this year, opening at $2.17 and closing at $2.50.  The current price as of 20 July, is $2.35.
While LiveHire and Search Party both focus on talent recruitment with differing business models, Elmo Software offers a suite of Software as a Service (SaaS) products addressing HR issues from recruitment to record keeping to benefits administration to training.
LiveHire has a cloud-based platform that creates “Live Talent Communities”, aggregating talent invited from multiple sources online and offline to join the Talent Communities, creating unique user profiles and enabling efficient inclusion into multiple Talent Communities.  In the words of company management, their platform creates a “Talent Economy” accessible by employers on-demand, with LiveHire’s software tracking communication between employers and prospective hires.
The company has been in business since 2011, first introducing its platform in the mining and resources sector in 2012 and migrating to large enterprises beginning in October of 2014.  The initial investor enthusiasm for this company might be explained by several factors.
First, revenue is based on client subscriptions and hosting fees, creating ongoing revenue sources.  The platform is attractive to candidates who join at no charge; have access from multiple job posting and other sources; and create a single digital user profile available to companies in multiple sectors.  Growth potential may have been the key driver.  The following graph from the LiveHire IPO Prospectus tracks client growth in Talent Community (TC) creation since 2014.  

Although not yet profitable, recent company announcements have shown additional client growth with four major clients added since the company’s successful capital raise in March.  LiveHire is now reaching businesses of all sizes.  Revenues have increased as well, with the company crediting business from Wesfarmers Ltd (WES) and Bupa Health Insurance for a 75% quarter over quarter increase.
LiveHire management claims it has no competition, which may be true in terms of the capabilities of its platform.  However, Search Party Group (SP1) is in the hunt, with a different model.  This company’s platform ties professional recruiters into the process, along with employers and candidates.  Recruiters upload candidate data bases and the Search Party software makes them available to employers actively searching while protecting confidential candidate information until contact is made.  Employers use the platform to connect with multiple recruiters and multiple candidates, paying a fee upon hiring.
The company has offices here in Australia and in Canada and had plans to expand into the US.  Search Party claims to have over 1500 active recruiters using its services serving 7,000 customers across 30 countries. 
Despite promising early growth, the company stumbled in the fourth Quarter of 2016, as seen in the following graph from a 4 January Search Party Performance Update.

The stock price was already declining and collapsed following the announcement.  The company launched a “strategic review” with initial results announced on 31 January.  As is often the case, expenditures to expand are high while the company’s cash position is weak.  Cost-cutting pledges were included, but perhaps the most troubling aspect in the announcement was the statement the user experience of our marketplace platform, whilst improving all the time, is still too complex and requires further simplification to facilitate exponential growth.   
By 28 February two members of the Board of Directors had resigned with the company’s managing director and CEO following suit in mid-March.  
The latest update released on 18 July included, among other factors, the following explanation for Search Party’s disappointing performance:
• The company commenced an aggressive and expensive customer scaling process without understanding properly that its platform was not developed to a stage needed to provide the high-quality outcomes needed to secure highly engaged and sustainable users.  The company lacked a focus on product excellence as the core to serving its customers and building its business.
The already devastated share price dropped 37% following this brutal announcement.  However, management still sees value in the company platform and believes it can restore shareholder value through cost-cutting, staff changes, and new partnership opportunities.
Elmo Software Limited (ELO) is unique here in that they go well beyond talent recruitment to offer a series of SaaS modules encompassing a range of HR issues, from onboarding – what was once called employee orientation – to learning management and succession planning to performance management.  
The company points out it operates in the HCM (Human Capital Management) software sector, offering automated solutions for stages in the total employee life cycle, from “hire to retire.”  Its HR Core platform handles administrative issues, but its principal focus is the Talent Management platform.  
The company began operating in 2002 with an e-learning platform for employee training and compliance issues, evolving with additional modules to its current offerings. Elmo targets companies with employee populations from 100 to 1000 and operates here in Australia, New Zealand, and Singapore, although management claims the platform could be adapted for global penetration.  Revenue comes from three year subscriptions, payable annually.  The company’s last financial reporting as a private entity showed revenues rising from $5.9 million in 2015 to $7.4 million in 2016, with gross profit increasing from $5.2 million to $6.4 million, although rising expenditures led to a loss in net profit. 
Australia now has an Organisation dedicated to promoting Tech Startups, called HR Tech.  Its first 12-week accelerator program designed to move startups to profitability will feature five HR Tech startups and seven scaleups.  Participating companies were announced by Global Talent Solutions company Hudson, SEEK Limited (SEK), University of Technology Sydney, and Slingshot – a company that partners promising startups with large corporations.  

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