MiX Telematics IPO Could Be Another Cloud Success

The company has big potential and a favorable market

   

MiX Telematics is one of the latest IPO hopefuls aiming to hit it big amid a friendly environment for cloud companies — but it’s no scrappy Silicon Valley operator.

MiX, which operates a cloud platform for tracking fleets, was founded in 1996 and is based in Midrand, South Africa. While it just filed for a U.S.-based IPO last week, it already is traded on the Johannesburg Stock Exchange.

MiX has been able to build a solid business. By leveraging Big Data, its platform can help reduce fuel costs, improve efficiencies, meet regulatory requirements, enhance driver safety and even mitigate theft. This is all done by allowing customers to access sophisticated dashboards that provide real-time info to users via mobile devices. MiX even offers in-vehicle video monitoring, which is critical for risk management.

Customers include Chevron (CVX), Nestlé (NSRGY), PepsiCo (PEP) and others, though MiX’s platform is available for small fleet companies too.

Growth has been healthy. From fiscal 2010 to 2013, the number of vehicles under contract grew at a compound rate of 20.3%, for a total of more than 359,000. Subscription revenues came to $74.2 million in FY 2013, up 18.9%, and profit increased by 24.4% to $13.9 million. During this time, Mix collected data on an average of about 57 million trips per month across 112 countries.

Data from ABI Research favors further momentum in the space. There currently are around 333 million commercial vehicles in operation across the globe, yet only 4% use telematics. That rate is expected to triple by 2017.

In fact, the industry might have no choice but to use cloud-based technology, as insurance companies and even governments are starting to require companies to use automated systems to help reduce theft and accidents.

Further improving MiX’s likelihood of a warm reception is the general love for cloud-based operators during the past year:

Company TICKER Return IPO Date
Textura TXTR 99.9% 06/06/2013
Marketo MKTO 94.2% 05/16/2013
Rally Software RALY 78.4% 04/11/2013
Workday WDAY 132.8% 10/11/2012
ServiceNow NOW 140.2% 06/28/2012

Given all this, the MiX offering should go off without a hitch

The company plans to list on the New York Stock Exchange under the symbol of “MIXT” and the lead underwriters include Raymond James (RJF) and William Blair.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/mix-telematics-ipo-could-be-another-cloud-success/.

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