NOTE: ONESOFT SOLUTIONS, THE COMPANY PROFILED IN THIS REPORT, BECAME A SOPHIC CAPITAL CLIENT ON NOVEMBER 16, 2017. THIS REPORT WAS ORIGINALLY PUBLISHED IN MAY 2017.
While Sophic Capital is focused on providing capital markets advisory services to early stage technology companies, this is our first “Investment Idea” report where we will highlight an undiscovered early stage technology company that we believe could offer investors significant potential returns. While we will not provide price targets, which you can find on traditional analyst reports, we will try to give financial perspective and valuation metrics that should help investors make their own decisions about where valuations could go. Finally it should be noted that the companies profiled in these new reports are not Sophic clients and we are not being compensated in any way by the companies in these reports. We may or may not own the stocks, but in this case, we have put our money where our mouth is.
We have a new investment idea for you from a team of oil & gas pipeline software veterans who built a prior company with $30,000 and sold it 18 months later for $7.6 million. Their new business, OneSoft Solutions (OSS:TSXV, OSSIF:OTC), is targeting the same industry with machine learning SaaS software to detect pipeline anomalies before they rupture, potentially destroying the environment and injuring or killing people. Microsoft (MSFT:NASDAQ) bought into OneSoft’s vision by offering one of 11 seats out of 721 candidates for its Accelerator program. As an Accelerator alumni member, OneSoft receives ongoing benefits of Microsoft’s technology, sales and marketing resources. And now two private preview customers are analyzing 25,000 miles of pipeline data using OneSoft’s solution.
OneSoft’s machine learning solution generates high-margin, recurring, SaaS revenue. The Company has an attractive business model with customers anticipated to pay US$5/month/per mile of pipeline with gross margin expected to be 90%+. Once customers migrate their data, we expect the solution to be sticky, meaning that this recurring revenue could last for many years. We also believe that monthly revenue could increase as new datasets, features, and functionality are added.