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Exclusive: AvePoint CEO Talks Microsoft Relationship, User Growth, SPAC Deal

Exclusive: AvePoint CEO Talks Microsoft Relationship, User Growth, SPAC Deal

AvePoint CEO TJ Jiang joined Benzinga's "SPACs Attack" show to discuss the company’s decision to go public via an SPAC and its relationship with Microsoft.

The SPAC Deal: AvePoint is merging with Apex Technology Acquisition Corporation (NASDAQ: APXT) in a SPAC deal that values the company at $2 billion.

AvePoint will trade under the symbol "AVPT" when the deal is closed in the first quarter of 2021.

“The SPAC process is actually much, much faster,” Jiang said when asked about going the SPAC route over a traditional IPO.

The team attached to Apex Technology Acquisition and their experience at Goldman Sachs (NYSE: GS) and Oracle Corporation (NYSE: ORCL) was attractive, he said. 

“We think they could be real value at our business.”

By going the SPAC route, Jiang said his team can now focus on growing the business.

When asked if the SPAC merger will close in the first quarter, Jiang told Benzinga: “absolutely, it will be the first quarter of 2021.”

Watch the full interview win the video below:

Microsoft Relationship: AvePoint has a long relationship with Microsoft Corporation (NASDAQ: MSFT) and acts as the bridge between Microsoft and smaller companies, AvePoint's CEO said. 

“We have a relationship with Microsoft for the last 19 years,” Jiang said.

AvePoint is an independent software vendor for Microsoft and is one of the top five independent software vendors globally, he said. The company is in the same class as larger companies like Adobe Inc (NASDAQ: ADBE) and DocuSign (NASDAQ: DOCU), Jiang said. 

The CEO calls the relationship with Microsoft a "win-win symbiotic relationship," adding that AvePoint is important to Microsoft’s success.

“We have first-mover advantage,” he said.  

AvePoint invested in Microsoft cloud early and has offered B2B products for the last nine years, Jiang said. 

'No Singular Competitor': AvePoint doesn’t do just one thing, the CEO said.

AvePoint handles compliance, record management, data integration and transformation, data management and governance, he said. 

“So it’s really an end-to-end SaaS platform that handles the entire life cycle of enterprise data from birth to retirement.” 

AvePoint has “no singular competitor,” Jiang said.  

Strong User Growth: AvePoint has 7 million active users from the Microsoft 365 network and a goal to get to 50 million active users. The company said it can grow from a 3% share of Microsoft 365 customers to 10%.

AvePoint wants to move aggressively and scale the business, Jiang said. 

AvePoint also supports multi-cloud and can help customers move from Slack Technologies (NYSE: WORK) to Microsoft Teams, he said: "we do the migration."

AvePoint was the first to offer this support globally and the company is seeing strong demand for migration, Jiang told Benzinga. 

“We also support multi-cloud,” the CEO said.

Some companies use Microsoft Teams, Zoom, Salesforce and Amazon Web Services together, he said. 

Related Link: Microsoft Analysts: Q1 Shows Payoff From Cloud Shift, Azure Narrowing The Gap With AWS

Financials: AvePoint is estimating that revenue will grow 26% year-over-year to $148 million in fiscal 2020.

The company is forecasting revenue to hit $193 million and $257 million in fiscal 2021 and fiscal 2022, respectively.

AvePoint is increasing its recurring revenue, Jiang said. 

This is the second year of the company's annual recurring revenue growing at more than 30% year-over-year, the CEO said. 

The shift to recurring revenue comes from a business conversion to focus on subscription services in 2018.

“We have grown this business for the last 19 years with only $60 million primary capital, with no debt.”

Jiang said AvePoint is financially disciplined and is showing high growth.

“We are one of those rare SaaS companies that have high growth and grow at a profitable cash positive margin.”

Price Action: Shares of Apex Technology trade at $14.38 at the time of writing. Shares have traded between $9.27 and $15.31 over the last 52 weeks.


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