Israel’s Dragontail Systems latest tech stock after ASX listing

Israel-based food delivery technology group Dragontail Systems has lodged its prospectus before an Australian IPO.

technology: The Israel-based food delivery technology group Dragontail Systems has lodged its prospectus before an Australian IPO slated to raise $6 million.

The Australian can reveal the company is hoping to reap a valuation of $34.7m upon listing, with plans to hit ASX boards on November 10.

Thirty million shares will be on offer at a price of 20c each, with the deal the latest in a spurt of tech listings on the ASX.

Dragontail is eyeing a leadership position in the increasingly competitive food delivery space, with flagship product the Algo Dispatching System securing some big names offshore.

The group’s customers include Pizza Hut Canada, Pizza Hut Israel and the largest Israeli burger chain, Burgeranch, while it is also slated for use at some KFC, Taco Bell and Wagamama outlets in Cyprus from early next year. The fledgling company’s revenue stream is based on monthly licensing fees for the use of its technology and upfront set up costs.

Chief executive and co-founder Ido Levanon said the group differed from the likes of Deliveroo and UberEats, which have proven popular in the Australian market, as it offered restaurants more control.

“A customer’s ability to track their order and driver is maybe 5 per cent of our system’s capabilities and usage,” he said.

“While it offers the ability to track a driver’s location and update it in real time, its main point of difference is the ability for restaurants to track and optimise an order inside their restaurant. The Algo is mainly an operational tool that enables a restaurant to operate more effectively.”

Mr Levanon said the decision to list in Australia was made for three reasons: the acceptance of Israeli tech groups in recent ASX listings, the more mature market for technology companies compared with Israel and because it serves as a gateway to the Asia-Pacific.

The comments follow a statement from ASX managing director Dominic Stevens yesterday that highlighted the local bourse’s push to be the Asia-Pacific leader in tech floats.

“Our focus on the technology sector has been successful, with close to 170 tech stocks now listed,” Mr Stevens said. “ASX is building a reputation as the technology exchange of the Asian time zone.”

Dragontail is planning to shift some of its R&D facilities to Melbourne once the IPO is out of the way, with the funds raised to be primarily directed towards establishment of the sales and operations department. It has tapped Melbourne-based Paul Steele, a co-founder of Benefit Capital and executive director at Ethical Property Australia, to be non-executive chairman.