By bringing a best-in-class technology solution to a potential US$12.5bn niche global market, Socialsuite has proven real-time monitoring of social impact data for not-for-profit (NFP) enterprises is possible, and potentially, highly profitable.
Launched in 2014 by Damian Hajda and Doctor Clara Ong, the company and the technology addressed a need for enterprises operating in the social sector to effectively report their social impact to funders.
With a client base that now includes some blue chips of the NFP sector, including World Vision, along with notable Australian organisations in YMCA, Anglicare and Youth off the Street, Socialsuite has made substantial progress.
Robust financial growth
It expects to generate revenues of A$700,000 in 2018, increasing by about 150% to A$1.8mln in 2019.
This is forecast to ramp up substantially by 2020, surpassing the $5mln mark and in the ensuing two years, compound annual revenue growth of 65% is forecast.
Focusing on the bottom line, Socialsuite is expected to deliver its maiden year of profitability in 2020 with underlying earnings of $1mln.
This is projected to increase nearly six-fold by 2022.
Challenges of social impact measurement
Compared with profit-focused entities, whether they be public or private, the breadth of data collection in the NFP space is far less comprehensive.
Accurate performance measures can be elusive, and this can impede organisations from gaining financial support and meeting accountability standards.
Socialsuite has solved this by creating the world’s first marketplace of social impact measurement metrics.
The metrics are published by experts from around the world and can be downloaded into Socialsuite like apps from an app store.
Developing a technology that enables NFPs to collect the metric data required to measure their performance has been challenging for Socialsuite, but the founders and early customers are now reaping the rewards of their efforts.
Socialsuite favoured over banking and marketing apps
While an NFP doesn’t receive the same media coverage as the likes of International mining giant BHP (ASX:BHP), don’t underestimate the profile of the market.
This was evidenced recently when the Socialsuite founders competed in a Salesforce World Tour pitch competition, claiming first prize of $128,000.
While the prize money won’t go astray, a real takeaway was the fact that their product ousted high-profile banking and marketing apps pitched at profit-focused entities.
Hajda echoed this sentiment in saying, “Winning the competition was a great validation, not only for the not-for-profit sector, but also effective in shining a spotlight on investing with a social purpose.
“From our perspective, I think it’s a real win as it highlighted the surging importance of social impact measurement.”
One stop shop for social impact measurement
Providing that measuring capacity is at the heart of Socialsuite.
The last three years hasn’t so much been devoted solely to selling the product; substantial groundwork was involved in identifying and embedding research bases and tools that can be used to measure social impact metrics that are sometimes difficult to define.
Users can now choose a validated impact measurement framework from hundreds available on the company’s impact marketplace.
Using a SaaS platform with a mobile app, staff easily collect impact data from multiple sources.
Dashboards show the impact achieved in real time with artificial intelligence providing benchmarks against similar investments.
Measurement tools critical in attracting funding
This is particularly useful when potential investors are looking to inject funds into NFPs.
Potential contributors can be government instrumentalities, corporate enterprises or philanthropists.
With numerous NFP organisations both in Australia and overseas seeking funding, providing those organisations with the expertise to present their investment case is crucial.
The process of raising funds is more aligned with the corporate world than it was in the past, hence, NFPs need to run their organisations like a business with the same accountability expectations and transparency as is expected from profit-focused companies.
Services also provided to profit-focused organisations
Though Socialsuite provides NFP related data, its client base includes enterprises outside this sector.
Australia Post is a key client, and Clara Ong recently said: “Australia Post is involved in some pretty amazing corporate social responsibility programs.
“They don’t just want to do it as a public relations or marketing exercise, they want to measure the impact and ensure the service providers they work with are having an impact.”
Miguel Oyarbide, corporate responsibility manager, Australia Post, said: “At Australia Post we use Socialsuite to measure the impact of our community investments and programs.
“The insights that Socialsuite provides allow us to better understand the value of our programs, make better decisions and ensure we make the biggest impact.”
As a fast-growing enterprise with an early mover advantage in a niche market, management is looking to use this as a platform for future progress.
Raising $1.5mln in capital
To take Socialsuite to the next level requires an injection of capital, and the company is in the process of raising $1.5mln.
Once revenues move towards the $5mln mark, management is of the view that the company may be ready for an ASX listing.
Corporate activity could support IPO
There has been recent takeover activity in the SaaS space, particularly in relation to companies that have a unique intellectual property and a leading presence in niche markets.
The offer has board support and is expected to be ratified shortly.
While not suggesting Socialsuite is going to be snapped up by Oracle, this transaction demonstrates the importance of having quality intellectual property.
The Aconex acquisition price wasn’t purely earnings-related as the company generated EBITDA of about $15mln in fiscal 2017.
Instead, Oracle took a view on the technology and its potential to help it dominate a multibillion-dollar marketplace.
It is likely to be equally tricky to place a value on Socialsuite, but industry dynamics suggest that whether it be a capital raising, an IPO or a takeover, the implied price tag is likely to surprise on the upside.