By Carrie LaFrenz
Wilson Asset Management lead portfolio manager Oscar Oberg is expecting big things from sovereign cloud services provider AUCloud after backing the micro cap in its pre-float fund raise.
WAM Microap Fund tipped in $2.5 million via a cornerstone placement. Separately, AUCloud this year has raised nearly $7.5 million via a rights issue, in which serial entrepreneur and founding investor Bevan Slattery took up his full rights.
AUCloud initially raised $10 million in 2017 from seed investors including Icon Group cancer care provider founders Cathie Reid and Stuart Giles; a personal investment from from Paradice Investment Management fund manager, James McBeath and Mr Slattery. A year later it raised another $10 million.
Ms Reid, who is chairman, Mr Giles and Mr McBeath’s family together control nearly 40 per cent of AUCloud, which is slated for an ASX listing in either November or December.
Issues around sovereignty were thrust into the spotlight earlier this year, when the government opted to use Amazon Web Services to host its COVIDSafe app. During COVID-19 it also became clear that some government staff working from home needed to access sensitive data in a clear and safe manner.
Following these concerns, the government is now considering restricting foreign cloud companies from handling certain government data sets – which could prove to be a major win for small local players like AUCloud.
“With all the negative press around the COVIDSAFE app – we think the issue around sovereignty is going to increase,” Mr Oberg told The Australian Financial Review.
“It will be a bullish time for software providers. As a pure play company in this space – the demand for cloud providers that are Australian owned as opposed to the global behemoths like Azure or AWS, will increase. Particularity with their exposure to government departments such as defence and key industries like financial services.”
AUCloud is Australia’s sovereign cloud Infrastructure-as-a-Service (IaaS) provider. It is exclusively focused on government and critical national infrastructure industry communities.
Mr Oberg said he is seeing increased demand for Australian-domiciled businesses across different sectors. Australian-owned AUCloud fits into this theme in relation to the storage of data, particularly for sensitive material within government departments
He added that recent cyber attacks at companies such as Lion and Toll Group will redirect work to specialist cloud providers.
“AUCloud offers the security, the compliance and they have an increased level of efficiency and productivity to their clients,” he said. “They also have a successful partner channel with some of the largest software companies in the world.”
Ms Reid said AUCloud is targeting profitability this financial year as the importance for sovereign based security has been heightened by recent events, driving up demand for specialist providers.