Investors sell off Melbourne-based Careteq on debut

Healthcare software player Careteq’s market debut has had a rocky start, with shares falling 25 per cent as it reveals plans for a busy 2022.

Careteq’s market debut has seen investors sell off some of the $6m raising, with shares closing down 20 per cent. Picture: NCA NewsWire / Damian Shaw

Health tech player Careteq is planning for a busy year ahead, after hitting boards on Monday, with tens of thousands of devices linked to the company’s software suite set to be sent out en masse in the United States.

Careteq’s chair Mark Simari said the healthcare player was set to put the $6m it raised in its Monday listing towards expansion plans in the coming year.

This comes as Careteq hit ASX boards, slumping 25 per cent on debut as investors sold off their holdings.

One of the first initial public offerings for 2022, Careteq had priced its book at $0.20 a share.

The book build had seen Careteq assemble a suite of investors, including Deakin University which held 4.04 per cent of the company as it hit boards.

But investors sold off the Melbourne based company slashing its implied value, with shares closing 20 per cent down at $0.16.

The oversubscribed listing had valued the company at an indicative market capitalisation of $24.7m.

Mr Simari said although the company wasn’t currently cash positive, it planned to be breaking even within 12 months on the back of the big US deal.

“We‘ve got an agreement with the SiTa Foundation targeting domestic violence,” he said.

“We get a monthly fee for every device. They’ve guided to us that there will be 10,000 going out very quickly going out to 100,000 in the next 12 months.”

The device, which is aimed at women, clips onto clothing and can be used to record audio and call the police.

Careteq’s technology, including sensors and devices which detect falls or unusual behaviour, and monitor patient health, are currently sold in Australian and overseas markets.

Careteq has pitched itself as a disrupter in the aged care and disability services space.

The software provider had noted looming skills shortages and rising costs across the sector, which could be met with Careteq’s Assistive Living technology.

The company will put the $6m raised, plus another $620,000 of its own funds, towards expanding its tech offerings, as well as boosting sales and marketing.

Careteq will drop $1.2m on sales and marketing, in part to fund a US expansion to access the country’s huge healthcare industry.

The company currently has one employee in the United States, but will recruit a new sales executive early in 2022, with $200,000 allocated to fund the role.

The funds raised in its listing will be used by Careteq to “accelerate its growth initiatives and capitalise on its early-mover advantage”.

Careteq chief executive Peter Scala said the aged care and disability services space was “s primed for a technological disruption due to a dire need for productivity improvements”.

“As the cost of providing aged and disability care rises, it is our belief that this will prompt government and non-government funders to increasingly turn to Assistive Living Technology solutions, such as ours, to control costs and provide better patient outcomes,” he said.

The move to chase software opportunities comes after several decades in the medical technology and equipment space for Careteq executives.

Mr Scala and Mr Simari held senior positions at ASX-listed Paragon Care limited, Australia’s largest medical equipment company.

Originally published as Investors sell off Melbourne-based Careteq on debut