WiseTech looks beyond IPO

It’s on track to become one of the biggest technology listings to grace the ASX in some time, but WiseTech Global founder and chief executive Richard White is desperately keen to avoid the “unicorn” tag for his company if he can help it.

“I don’t like that word unicorn, which is a strange, mythical beast and that’s not us. It doesn’t matter what our valuation is, I don’t feel good about (the label),” White says.

The one thing White does feel good about is the validation his company’s impending IPO, which values the outfit between $763 million and $1.2 billion, provides to the years of hard work he and his team have poured into making the software a success.

WiseTech, which started life in 1994, provides cloud-based software solution for the logistics industry, giving freight forwarders a single platform to manage the movement of goods, from start to finish. White was instrumental in developing the software in what was a distinct departure from a youth largely devoted to the service of rock and roll.

Having shared the stage with the likes of AC/DC, White subsequently started a successful guitar repair business. After selling that business for a profit, White navigated through a list of ventures from lighting design to computer wholesaling. All of these proved profitable, but White was convinced he needed to tackle something bigger and commit to it.

“I decided that I had to choose something and stick with it for a very long time to create real value, I had done things but had always exited before the big bang,” White tells The Australian.

“I was doing network and integration consulting and a couple of customers were freight forwarders and their systems were just terrible. I started working within these businesses as a consultant writing software and realised that there was this huge complex problem that no one was addressing.”

That was in 1992 and White knew back then that he was on to something. Like Atlassian, WiseTech was able to recognise the transformative power of the software-as-a-service (SaaS) model just as it was starting to emerge. The subsequent growth of SaaS, driven by widespread cloud adoption, has been a boon for WiseTech and White maintains that he has never been in a rush to take the company public.

“I want to get this done because the business has some important future goals to deliver but it’s not all about the IPO,” he says. “An IPO is a one-time event and we want to get through it rather than get to it.”

He’s not particularly perturbed about the state of the global market either. “We are not trying to absolutely maximise the event. Whether the markets are good or choppy this is a company that shines through, we just have to get it done and just get on with the process of growing the business.”

According to White, the IPO underpins the existing strength of WiseTech, which has been profitable for the past 10 years and is building scale at a rate of knots. With more than 6000 customers and 150,000 module users across 7000 sites in more than 115 countries, White reckons WiseTech does not need put on a show to attract investors.

A great company is never short of investors and in WiseTech’s case a steady procession of interested private equity investors over the course of the past five years galvanised White’s resolve to pick the right moment and the right investors. “I gave a lot of shares to staff but I was unwilling to build a company on borrowed money. It’s much better to build one based on solid resources,” he says.

Here again WiseTech shares common DNA with Atlassian, a bootstrapped business with an on-demand model that prioritises research over sales and marketing . In WiseTech’s case its biggest advantage has been the ability to provide a reliable platform that customers can also customise to suit their individual needs.

Between domestic-focused outfits and freight companies weighed down by legacy systems, WiseTech has managed to secure relationships with 19 of the top 20 freight forwarders in the world.

“The best technology sells itself so you don’t need to spend a lot on sales and marketing,” White says, adding that the success of Atlassian, Aconex and WiseTech points to a template that could be defined as the “Australian start-up model.”

The common thread shared by all three companies is the focus on business-to-business (B2B) solutions and an emphasis on long-term strategic thinking.

“B2B businesses take a lot longer to mature and they are also far more stable and there tends to be multiple verticals that you can attack,” White says.

“It requires patience and one of the problems with early stage entrepreneurs is that their short fuse often gets in the way to making long-term decisions.”

Growth through acquisitions is on WiseTech’s agenda, but White says that research and development is key to securing the company’s future.

“Low on sales and high on R&D, I think that’s really the Australian model,” he says.