Delivery platform provider serves up robust growth

Shares in microcap Zoom2u Technologies (Z2U) were up 14.50% ($0.30) at the close today following revelations that the delivery technology services company’s first half FY22 gross marketplace revenue (GMV) was up 54% to $10.9m.

Much of the increase can be attributed to ongoing platform adoption by a growing list of top-tier customers, including Best & Less, Super Pharmacy, Jaycar and Australia Post.

Also positively impacting the first half FY22 were covid lockdowns in both Sydney and Melbourne.

Revenue for the half-year grew 46% versus the previous period to $2.7m.

Over the first half, the company added around 8700 new customers to its delivery marketplace, while 120 new customers signed up for the Locate2u SaaS product.

Business model

To the uninitiated, Zoom2u – which listed on the ASX 10 September 2021 at $0.20 a share - is the delivery platform that connects customers with a network of couriers Australia-wide.

In short, Zoom2u has a software-as-a-service (SaaS) platform that lets retailers manage their own fleet of delivery drivers.

While retailers use Zoom2u’s SaaS Locate2u platform to manage delivery drivers, customers can use the technology to track deliveries.

Since launching in 2014, Zoom2u has processed more than 2 million deliveries.

Pipeline

In December 2021, the company acquired Local Delivery Shopify App for $0.88m. Comprising mostly e-commerce businesses across 45 countries, Local Delivery’s 570 customers, are expected to provide additional leads for the Locate2u sales team.

The acquisition of Local Delivery is also expected to expand the company’s customer base in the North American and UK markets. Management notes the first US based Locate2u sales representative has commenced work, initially targeting Local Delivery customers for Locate2u.

Zoom2u raised around $8m during its IPO and had $6.5m cash in the bank at the end of December, which underpins continued growth of its core businesses.

Last-mile delivery

CEO Steve Orenstein believes today’s results reflects further market traction as clients see the value of deploying a leading technology solution in last-mile delivery.

“The Locate2u sales team is gaining traction with a range of small, medium and large businesses that recognise the need to offer transparent and efficient deliveries to their customers,” Orenstein said.

And along with its existing revenue growth, “early discussions with our new Local Delivery customers suggests a cross selling opportunity for the Locate2u product”, he added.

“I look forward to keeping Zoom2u shareholders up to date on our progress.”

Zoom2u's share price was on a tear today.